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Endogeneity, and the distortions on the estimation of economic models that it causes, is a familiar problem in the … for measuring technical efficiency, the effects of endogeneity on such efficiency estimates have received little attention …. The aim of this paper is twofold. First, we further illustrate the endogeneity problem and its causes in production …
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In industry sectors where market prices for goods and services are unavailable, it is common to use estimated output and input distance functions to estimate rates of productivity change. It is also possible, but less common, to use estimated distance functions to estimate the normalised support...
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A convenient and simple GMM procedure for estimating stochastic frontier models in the presence of endogenous regressors is proposed. Monte Carlo simulations show that the proposed estimator works very well in finite samples. We apply the proposed method to panel data of Norwegian dairy farms to...
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