The field of production frontier estimation is divided between the parametric Stochastic Frontier Analysis (SFA) and the deterministic, nonparametric Data Envelopment Analysis (DEA). This paper explores an amalgam of DEA and SFA that melds a nonparametric frontier with a stochastic composite...

The literature of productive efficiency analysis is divided into two main branches: the parametric Stochastic Frontier Analysis (SFA) and nonparametric Data Envelopment Analysis (DEA). This paper attempts to combine the virtues of both approaches in a unified framework. We follow the SFA...

From an empirical perspective, this paper critically examines the concepts of returns to scale (RTS) and economies of scale (EOS), and argues that the concept of EOS is more relevant and broader enough to exhibit proper scale economies behavior of firms. Two approaches, i.e., production function...

When benchmarking production units by non-parametric methods like data envelopment analysis (DEA), an assumption has to be made about the returns to scale of the underlying technology. Moreover, it is often also relevant to compare the frontiers across samples of producers. Until now, no exact...

Estimating efficiencies of higher education institutions (HEIs) has become a central area of research in efficiency analysis literature, particularly during the last two decades. Although the number of efficiency analysis researches in higher education has risen, comparative research estimating...

Simar and Wilson (J. Econometrics, 2007) provided a statistical model that can rationalize two-stage estimation of technical efficiency in nonparametric settings. Two-stage estimation has been widely used, but requires a strong assumption: the second-stage environmental variables cannot affect...

Parametric stochastic frontier models yield firm-level conditional distributions of inefficiency that are truncated normal. Given these distributions, how should one assess and rank firm-level efficiency? This study compares the techniques of estimating a) the conditional mean of inefficiency...