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Afifah, Salma Inayatul, and Suwanda. "Analisis Pengukuran Tingkat Efisiensi Perusahaan Menggunakan Metode Stochastic Frontier Analysis (SFA)." Bandung Conference Series: Statistics 3, no. 2 (2023): 459–65. http://dx.doi.org/10.29313/bcss.v3i2.8369.
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Abstract. The stochastic frontier has two error components, namely errors originating from random errors and errors originating from other factors than can be controlled, namely inefficiency errors. The Stochastic Frontier Analysis model is an extension of the deterministic frontier model developed by Aigner and Chu (1968) in Coelli et al (1998). Stochastic Frontier Analysis (SFA) is one of the best known techniques for determining efficiency. So to overcome the level of efficiency of a company researchers will use the stochastic frontier with the Cobb-Douglas production function model. The profit function (profit) is a two-way approach, and is often used to measure the level of production efficiency. Measuring the level of production efficiency, both technical and allocative efficiency, using the commonly used profit function is only relative. This study aims to rank the level of efficiency of companies in Indonesia. The results of the research based on 10 life insurance companies in Indonesia in 2017-2021 can use the application of the stochastic frontier analysis model of the Cobb-Douglas function. And for the value of the highest efficiency level obtained by PT. Sequis Financial with a value of 0.9996, and for the lowest efficiency value obtained by PT. Sequis Financial with an efficient value of 0.0845.
 Abstrak. Stochastic frontier memiliki dua komponen galat yaitu galat yang berasal dari kesalahan acak dan galat yang berasal dari faktor-faktor lain ang bisa dikendalikan yaitu galat inefisiensi. Model Stochastic Frontier Analysis merupakan perkembangan dari model deterministic frontier yang dikembangkan oleh Aigner dan Chu (1968) dalam Coelli et al (1998). Stochastic Frontier Analysis (SFA) adalah salah satu teknik yang paling dikenal untuk menentukan efisiensi. Maka untuk menanggulangi tingkat efisiensi suatu perusahaan peneliti akan menggunakan stochastic frontier dengan model fungsi produksi cobb-douglas. Fungsi keuntungan (profit) merupakan pendekatan dua arah, dan sering digunakan untuk mengukur tingkat efisiensi produksi. Mengukur tingkat efisiensi produksi, baik efisiensi teknis maupun alokatif, dengan menggunakan fungsi profit yang umum digunakan hanya bersifat relative. Penelitian ini bertujuan untuk mengurutkan tingkat efisiensi perusahaan di Indonesia. Hasil penelitian berdasarkan dari 10 perusahaan asuransi jiwa di Indonesia pada tahun 2017-2021 dapat menggunakan penerapan model stochastic frontier analysis fungsi cobb-douglas. Dan untuk nilai tingkat efisiensi tertinggi didapatkan oleh PT. Sequis Financial dengan nilai 0.9996, dan untuk nilai efisiensi terendah didapatkan oleh PT. Sequis Financial dengan nilai efisien 0.0845.
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Yoon, Danbi, and Hohsuk Noh. "Estimation of smooth monotone frontier function under stochastic frontier model." Korean Journal of Applied Statistics 30, no. 5 (2017): 665–79. http://dx.doi.org/10.5351/kjas.2017.30.5.665.
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Kalirajan, K. P., and M. B. Obwona. "FRONTIER PRODUCTION FUNCTION: THE STOCHASTIC COEFFICIENTS APPROACH." Oxford Bulletin of Economics and Statistics 56, no. 1 (2009): 87–96. http://dx.doi.org/10.1111/j.1468-0084.1994.mp56001007.x.
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Carter, Douglas R., and Frederick W. Cubbage. "Stochastic Frontier Estimation and Sources of Technical Efficiency in Southern Timber Harvesting." Forest Science 41, no. 3 (1995): 576–93. http://dx.doi.org/10.1093/forestscience/41.3.576.
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Abstract This research provides estimates of average industry and firm-specific technical efficiency using an econometric stochastic frontier production function for individual firms operating in the southern U.S. pulpwood harvesting industry in both 1979 and 1987. The stochastic frontier production function is capable of distinguishing deviations from the frontier due to uncontrollable stochastic elements, as well as provide a pure measure of technical efficiency. Results indicate that mean industry technical efficiency was nearly constant at 60% in both periods while frontier technical change averaged 1.8% annually over the period. Elements of human capital, technology, and production scale were influential in explaining efficiency differentials among firms. However, the relative influence of these factors changed over time. For. Sci. 41(3):576-593.
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Arsad, Roslah. "Measuring Efficiency Performance in Economic Productivity Function: Parametric and Non-Parametric Frontier Approach." International Journal of Research and Innovation in Social Science VIII, no. VIII (2024): 4162–72. http://dx.doi.org/10.47772/ijriss.2024.8080315.
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The parametric and non-parametric frontier approach is the famous frontier measurement efficiency in economic productivity. Many researches on economics-based has focused on efficiency. Basically, efficiency comprises two important components. First is technical efficiency and second is allocative efficiency. Combination of technical and allocative efficiency called as economic efficiency. In order to measure both components of efficiency, parametric and non-parametric approaches have been utilized to either estimate or calculate the efficiency frontier. Many studies have adopted non-parametric, deterministic approach such as Data Envelopment Analysis (DEA) that impose no functional form on the cost or production function, but parametric estimation of cost, production, or profit functions are more relevant approach in the economics-based literature. Stochastic Frontier Approach (SFA) is the most popular among parametric model approach. Deterministic frontier functions can be solved using either mathematical programming or econometric techniques, while stochastic specifications are estimated solely through econometric methods. This study’s main contribution is a review of efficiency concepts, measurement methods, and the strengths, limitations, and data requirements of parametric and non-parametric models.
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Guo, Xu, Gao-Rong Li, Michael McAleer, and Wing-Keung Wong. "Specification Testing of Production in a Stochastic Frontier Model." Sustainability 10, no. 9 (2018): 3082. http://dx.doi.org/10.3390/su10093082.
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Parametric production frontier functions are frequently used in stochastic frontier models, but there do not seem to be any empirical test statistics for the plausibility of this application. In this paper, we develop procedures to test whether or not the parametric production frontier functions are suitable. Toward this aim, we developed two test statistics based on local smoothing and an empirical process, respectively. Residual-based wild bootstrap versions of these two test statistics are also suggested. The distributions of technical inefficiency and the noise term are not specified, which allows specification testing of the production frontier function even under heteroscedasticity. Simulation studies and a real data example are presented to examine the finite sample sizes and powers of the test statistics. The theory developed in this paper is useful for production managers in their decisions on production.
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A.A. Akinsulu. "A stochastic frontier approach to determine technical efficiency of cassava farmers in Ondo state, Nigeria." Journal of Agriculture and Environment 20, no. 2 (2025): 43–52. https://doi.org/10.4314/jagrenv.v20i2.5.
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The stochastic frontier production model showed an improvement over the traditional average function and the deterministic functions, which use mathematical programming to construct production frontiers. The study was conducted to analyze the technical efficiency of sole cassava farmers in Ondo State using a stochastic frontier model. Primary data were obtained with the aid of a structured questionnaire, and a multistage sampling technique was used to sample 160 respondents. The result revealed that the variance of parameters (gamma and sigma squared) of the frontier production function was both significant at 1% levels. The mean technical efficiency was 0.732. Farm size and fertilizer were significant and had positive effect on output, whereas labour was significant and inversely related to the farmers’ technical efficiency. The determinants of technical inefficiency of cassava farmers in Ondo State indicated that sex (0.094), family sisze (0.209), level of education (-0.011), farming experience (-0.614), co-operative membership (-0.10), extension visit (-0.061) and access to credit (-0.100) are the significant variables that influenced technical inefficiency of cassava production among the respondents. It was therefore recommended that the government should encourage and fund research in fertilizer production, there should be farming education on cassava production, farmers should belong to farmers’ co-operative society, more extension officers should be employed, and banks should grant loans to farmers at low interest rates.
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Arsad, Roslah, Zaidi Isa, and Siti Nabilah Mohd Shaari. "Estimating Efficiency Performance of Decision-Making Unit by using SFA and DEA Method: A Cross-Sectional Data Approach." International Journal of Engineering & Technology 7, no. 4.33 (2018): 25. http://dx.doi.org/10.14419/ijet.v7i4.33.23478.
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In this paper, a cross-sectional samples data of 115 Malaysian stocks have been employed to compare both Data Envelopment Analysis (DEA) method and Stochastic Frontier Analysis (SFA) method. These approaches are used to provide a review of frontier conceptual measurement, strength and limitation of the parametric and non-parametric models. Stochastic frontier production function of Cobb-Douglas type was utilized for the estimation. The function was estimated using the maximum likelihood estimation technique. Two models in DEA, DEA-CCR and DEA-BCC are applied in this study and the ranking correlation between SFA method and both models DEA are determined by using the Spearman rank method. The result revealed using SFA, the mean technical efficiency of sample consumer product companies is 37.5% and implies that companies operating at means level of technical efficiency could produce 80.1% more output for given level of inputs if they become technically more efficient. From empirical results of the SFA method, we determined that the deviations from the efficient frontiers of production functions are largely attributed to inefficiency effects (technical inefficiency). Finally, the findings also showed that the difference in ranking stocks performance using DEA-CCR, DEA-BCC and SFA methods. The main contribution of the paper is showing the comparative performance based on both model, DEA and SFA method using financial ratio.
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Riyardi, Agung, Maulidyah Indira Hasmarini, Yunastiti Purwaningsih, and Didit Purnomo. "Indonesian SDGS Problems: Technical Inefficiency Due to Economic Crime and Income Inequality." Journal of Lifestyle and SDGs Review 4, no. 3 (2024): e02325. http://dx.doi.org/10.47172/2965-730x.sdgsreview.v4.n03.pe02325.
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Objective: The study objective is investigating the technical inefficiency resulted from economic crime and its association with income inequality, with the study aims are modeling a stochastic frontier aggregate production function, measuring inefficiency, and mapping the economic inefficiency due to economic crime with income inequality association. Theoretical Framework: The main concepts are Crime Economics, Stochastic Frontier Analysis, and Aggregate Production Function. Method: The methodology comprises a stochastic frontier aggregate production function modelling to calculate technical inefficiency due to economic crime and mapping technical inefficiency due to economic crime with income inequality association. The data is Indonesian provincial data from 2016 to 2019 provided by Indonesian Statistics. Results and Discussion: The modelling reveals that aggregate production stochastic frontier is established and technical inefficiency due to economic crime is calculated. The mapping shows that some provinces experience positive association between technical inefficiency due to economic crime with income inequality. Research Implications: This study implies the importance of concerning theoritically and practically to technical inefficiency due to economic crime and its association with income inequality. These implication can encompass economic, social, and security sectors. Originality/Value: This study contributes to the literature by modeling the stochastic frontier aggregate production function that accommodates economic crime, measuring technical inefficiency due to economic crime, and mapping the technical inefficiency due to the economic crime with income inequality association. The relevance and value of this research are evidenced by SDGs components such as decent work and economic growth, reduced inequalities, and peace, justice, and strong institutions.
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Batiese, George E., Sohail J. Malik, and Sumiter Broca. "Production Functions for Wheat Farmers in Selected Districts of Pakistan: An Application of a Stochastic Frontier Production Function with Time-varying Inefficiency Effects." Pakistan Development Review 32, no. 3 (1993): 233–68. http://dx.doi.org/10.30541/v32i3pp.233-268.
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Two models of technical inefficiency with a stochastic production frontier are considered in this paper. In the frrst model, it is assumed that the frontier itself does not vary with time, while in the second, the frontier is allowed to move. These models are applied to four years of panel data on wheat farmers in four districts of Pakistan: Faisalabad and Attock in the Punjab, Badin in Sindh, and Dir in the NWFP. Using essentially the same stochastic frontier production function in each of the four districts involved, different stochastic specifications for the inefficiency effects are obtained for the different districts. Technical efficiencies of production of the individual farmers are predicted in each year in which they are observed. Varying patterns of technical inefficiency are observed. The null hypothesis (of no technical inefficiency) cannot be rejected in only one district. In the other districts, while inefficiencies appear to be present in all of them, they are declining at a fairly rapid pace in one. The results highlight the importance of analysis at a disaggregated level because it is clear that both the rate of technical change and relative efficiencies vary across regions and explicit cognisance must be taken of this both in research and policy formulation.
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Awuma, Williams, Oke Samuel, and Antwi-Adjei Alex. "Cassava: Farmers Adoption and Livelihood in Bono Region Performance of Stochastic Frontier Functions." International Journal of Multidisciplinary Studies and Innovative Research 10, no. 2 (2022): 1531–37. http://dx.doi.org/10.53075/ijmsirq/656357565465.
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The objective is to analyze the stochastic frontier function in comparing the performance of the Cobb-Douglas and Translog Frontier functions in the cultivation of cassava in the Bono Region of Ghana. The assumption is that given the same level of productive inputs of farmers at any given farming season, across heterogeneous farmlands, both functions are likely to produce the same results. The interview was used as the instrument for obtaining plot-specific data from 120 cassava farmers across six districts and data was analyzed using the quantitative technique. Direct predictors of output include plot size, labor, hoes, cutlasses, and cassava stems. Using a half-normal distributional assumption, the study evaluates variance parameters of the composed error terms. The results showed that the estimated functions produced comparable results in terms of magnitude and signs of input variables. While efficiency appeared to be much higher in Cobb-Douglas than in the Translog function, the variance parameter score for the CD function is significantly different from those of the Translog function, and the maximum output attainable for the given productive inputs was 40% and 15% respectively. This means that farmers can scale up their current crop yield by 60% and 85% respectively of their frontier functions using the same inputs and technology if the appropriate interventions are carried out. The limitation of the study is the non-inclusion of environmental factors such as rain as productive input and the study is limited to comparing frontier functions. The results underscored the importance of examining the current production behavior of farmers for reliability and policy inferences
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Du, Kerui, Federica Galli, and Luojia Wang. "A command to fit spatial stochastic frontier models with inefficiency spillovers." Stata Journal: Promoting communications on statistics and Stata 25, no. 1 (2025): 189–211. https://doi.org/10.1177/1536867x251322970.
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The interdependence among decision-making units challenges the assumption of cross-sectional independence in traditional stochastic frontier models. Based on the seminal spatial Durbin specification for the frontier function, Galli (2023, Journal of the Royal Statistical Society , C ser., 72: 346-367) introduced inefficiency spillovers to measure neighborhood effects related to the inefficiency determinants. This article presents a new command, sfsd , that fits the comprehensive spatial stochastic frontier model that Galli (2023) proposed, accommodating various spatial and nonspatial specifications in both the frontier and the inefficiency equations. sfsd is the first command that includes different typologies of spatial spillovers in a stochastic frontier framework, facilitating the investigation of contemporary research topics such as agglomeration and technology diffusion at both the firm and the regional levels. The description, options, and illustrative examples for the command are outlined in this article.
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Baba, K. C., Adedeji, S. O., and Waziri, A. "TECHNICAL EFFICIENCY OF YAM PRODUCTION IN PAIKORO LOCAL GOVERNMENT AREA OF NIGER STATE, NIGERIA." Journal of Agripreneurship and Sustainable Development 6, no. 1 (2023): 154–59. http://dx.doi.org/10.59331/jasd.v6i1.403.
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The study examined technical efficiency of yam farmers in Paikoro Local Government Area of Niger State, Nigeria was analyzed using the stochastic frontier production model. Data were collected from 90 yam farmers selected using simple random sampling technique. The data were collected with the aid of structured questionnaire and oral interview were analyzed using Descriptive statistics, stochastic frontier production function. The maximum likelihood estimate (MLE) of the stochastic frontier model production function revealed that the inputs were under-utilized the results of the socio-economic characteristics shows that yam farmers was dominated 50% by male farmers, within the range of 46- 55 years, 47% of the farmers had farm size less-than 1 hectare with at least 10 years’ experience. The technical efficiency of farmers differs substantially among the respondents, ranging between 0.325 and 0.952 with a mean economic efficiency of 0.807.
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Strokov, A. S. "Assessing the Impact of Land Degradation on Agricultural Output Using a Stochastic Frontier Production Function." Economy of regions 20, no. 4 (2024): 1161–74. https://doi.org/10.17059/ekon.reg.2024-4-12.
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Land degradation is a widely discussed and pressing global issue, as highlighted in the UN Sustainable Development Goals (SDGs). Understanding the extent of land degradation and its impact on agriculture requires precise research and an interdisciplinary approach due to the complexity of factors and indicators that characterize the issue. This paper focuses on one of Russia’s key agricultural regions, Samara Oblast, to examine how land degradation of agricultural soils affects crop production at the farm level. The dataset used in the study includes farm inputs (costs, land, and labour) and land quality variables, such as organic content (humus), levels of land degradation and soil erosion, as well as climate indicators, at the municipal level. To analyse the relationship between land degradation and agricultural output, the stochastic frontier analysis (SFA) was employed. This method not only estimates the parameters of a classic production function but also accounts for errors in the model by evaluating parameters related to risk and technical inefficiency. The results indicate that the proportion of degraded land in a district of the given region moderately reduces the maximum potential for crop production. In contrast, most inputs—such as production costs, cropland area, and labour—contribute positively to output. The study suggests that both the method and the estimates could be refined if data on land degradation, alongside other economic and environmental indicators, were collected and published annually.
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Nufus, Nurhayatin. "ESTIMASI FUNGSI PRODUKSI DAN EFISIENSI ALOKASI SUMBERDAYA PETANI KEDELAI DI LOMBOK BARAT." Jurnal AGRISEP 3, no. 1 (2006): 145–48. http://dx.doi.org/10.31186/jagrisep.3.1.145-148.
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This research aims to analyses factors influence on production and resources allocation of soybeans by farmer at West Lombok. Production function was estimated from survey data and technical efficiency was used to indicate farm management level through maximum likelihood, which was transformed into frontier stochastic production function. The land size, fertilizer (urea and TSP), labor and pesticide influence the production of soybean at site. The technical efficciency level of Soybean fann was 95,6 percent The usage of TSP and pesticide reached allocative efficiency while urea and seeds were al/ocative efficiency yet Key words: technical effICiency, allocative effICiency, and stochastic frontier production function.
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Bi, Huiquan. "The Self-Thinning Surface." Forest Science 47, no. 3 (2001): 361–70. http://dx.doi.org/10.1093/forestscience/47.3.361.
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Abstract This article introduces a generalized expression of the self-thinning rule, B = KSα Nβ, where B is stand biomass per unit area, N is stand density, S is relative site index, and K, α and β are parameters. On log scales, this equation becomes a self-thinning surface that defines a density-dependent upper frontier of stand biomass over a gradient of site productivity for a given species. This equation is formulated for parameter estimation as a stochastic frontier function with two error components that have different distributional properties. As an example, maximum likelihood estimates of the self-thinning surface and its confidence envelope were shown for Pinus radiata (D. Don). Furthermore, site occupancy was estimated through one of the error components of the stochastic frontier function. The conditional response of mortality at any given site occupancy was revealed by using regression quantiles. Light mortality was associated with increases in site occupancy, while heavy mortality caused a reduction in site occupancy. Changes in the estimated site occupancy had a linear relationship with changes in log stand density. The dynamic interplay between site occupancy and mortality, together with the random external effects on the self-thinning frontier, was suggested to drive the growth trajectories of individual stands during stand growth and self-thinning. Consequently, individual stands seldom travel along their self-thinning frontiers but are more likely to converge toward them during the self-thinning phase of stand development. FOR. SCI. 47(3):361–370.
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Hadri, Kaddour. "Estimation of a Doubly Heteroscedastic Stochastic Frontier Cost Function." Journal of Business & Economic Statistics 17, no. 3 (1999): 359. http://dx.doi.org/10.2307/1392293.
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Hadri, Kaddour. "Estimation of a Doubly Heteroscedastic Stochastic Frontier Cost Function." Journal of Business & Economic Statistics 17, no. 3 (1999): 359–63. http://dx.doi.org/10.1080/07350015.1999.10524824.
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Huang, Clief J., and Jin-Tan Liu. "Estimation of a non-neutral stochastic frontier production function." Journal of Productivity Analysis 5, no. 2 (1994): 171–80. http://dx.doi.org/10.1007/bf01073853.
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Choi, Seokwoo Jake, Gi-Su Kim, and BoKyung Kim. "Economic Efficiency of the Korean Container Terminals: A Stochastic Cost Frontier Approach." Journal of Korea Trade 26, no. 3 (2022): 23–44. http://dx.doi.org/10.35611/jkt.2022.26.3.23.
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Purpose - Recent issues such as vessel enlargement, strengthening of environmental regulations, and port smartization are expected to increase costs and intensify competition in the port industry. In the new normal era, when external growth has reached its limit, the efficient operation of ports is becoming indispensable for achieving sustainable growth. This study aims to identify the determinants of inefficiency by examining the cost structure and efficiency of container terminals in Korea and furthermore propose the political implications to derive the maximization of efficiency.
 Design/methodology - This study estimates the cost function of container terminal operators and identifies the efficiency of container terminals using stochastic cost frontier (SCF) in the first stage. In the second step, the SCF results are compared with the data envelopment analysis (DEA). Last, this paper proposes efficiency determinants on container terminal operation to establish appropriate strategies. Out of the 29 container terminal operators in South Korea, 13 operators participated in the survey. The translog cost function was estimated utilizing a total of 116 observations collected over the 2007-2017 period.
 Findings - Empirical analysis shows that economies of scale exist in Korea’s container ports, which provides a rationale for the government’s policy to establish the global terminal operator by integrating small terminal operators to enhance competitiveness. In addition, as a result of the determinants analysis, container throughput, weight of direct employment costs, and labour cost share have positive effects on improving cost efficiency, while inefficiency increases as the length of quay increases. More specifically, cost efficiency improves as the proportion of direct employment costs to outsourcing service costs increases.
 Originality/value - This study contributes to analyzing the inefficiency factors of container terminals through efficiency analysis with respect to a cost function. In addition, this study proposes the practical and political implications, such as establishing a long-term manpower pool, the application of the hybrid liner terminal system, and the construction of a statistical data system, to improve the cost inefficiency of terminal operators.
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Prędki, Artur. "Wybrane metody estymacji w semiparametrycznym modelu granicznym." Przegląd Statystyczny. Statistical Review 2012, no. 3 (2012): 215–32. http://dx.doi.org/10.59139/ps.2012.03.1.
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In the paper estimation methods of the production function which are used in the special frontier model are described. The frontier model is of a semiparametric nature, as the production frontier is not given analytically. However, assumptions related to the model errors have parametric character. In order to estimate the frontier, the so-called StoNED (Stochastic Non-smooth Envelopment of Data) multi-stage procedure is used. The first step forms the CNLS method (Convex Nonparametric Least Squares), which is a nonparametric counterpart of OLS. Next stages run according to a scheme, which has been used on the ground of the stochastic frontier models for many years. As a result not only the estimator of the production function is received, but also the estimator of the inefficiency term for a given production unit. In the paper some critical remarks are presented. They are related to faults and limitations of the research methodology. Next, the procedure is illustrated with an empirical study. Finally, potential directions for further research in the area are presented.
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Ghroubi, Mohamed, and Ezzeddine Abaoub. "A Meta-Frontier Function for the Estimation of Islamic and Conventional Banks’ Cost and Revenue Efficiency: The Case of Malaysia from 2006 to 2012." International Journal of Business and Management 11, no. 5 (2016): 254. http://dx.doi.org/10.5539/ijbm.v11n5p254.
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<p>We measure cost and revenue efficiency of the Islamic and conventional Malaysian banks by using the stochastic frontier method and the meta-frontier analysis (MFA) over the period 2006-2012. The use of MFA allows for the correction of the efficiency measurement errors caused by the technological and operational gap. The specific as well as the common frontiers obtained by the stochastic frontier method show the superiority of Islamic banks (IBs) compared to conventional banks (CBs) in terms of cost and revenue efficiency. This can reflect their high managerial capability. Efficiency measurement using MFA partially revealed different results. CBs have higher annual averages of cost efficiency scores than those of IBs over the period 2006-2011. The observed evolutionary trends of these averages contradict those of the capital base. This change in results is explained according to Johnes et al. (2013) by the modus operandi of IBs which seems in average less efficient than that of CBs. As for revenue efficiency, IBs are more efficient than CBs over the entire study period even though the evolution of the technological gap ratio confirms the inefficiency of their modus operandi. These results may be useful to political decision-makers and regulatory authorities. ch indicate the complexity of the audited firm and the characteristics of the audit.</p>
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Marmolejo-Saucedo, José Antonio, Román Rodríguez-Aguilar, Miguel Gastón Cedillo-Campos, and María Soledad Salazar-Martínez. "Technical efficiency of thermal power units through a stochastic frontier." DYNA 82, no. 191 (2015): 63–68. http://dx.doi.org/10.15446/dyna.v82n191.51152.
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<p class="ADYNAAbstrac"><span lang="EN-US">This work presents a model to obtain a stochastic frontier production function of a Mexican power generation company. The stochastic frontier allows us to evaluate the technical efficiency of an energy producer according of the level of inputs. Electricity generation based on thermal generation is highly expensive due to operational inefficiency of thermal power plants. At the moment, in Mexico, technical efficiency of thermal power units has not been studied for the national electricity system. Therefore, in order to know the productivity levels of thermal generation, an empirical application of the stochastic frontier model is obtained using a panel data of thermoelectric units from the Mexican electricity system for the 2009-2013 period.</span></p>
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Azizul Baten, Md, Masud Rana, Sumonkanti Das, and Md Abdul Khaleque. "Technical Efficiency of Some Selected Manufacturing Industries in Bangladesh: A Stochastic Frontier Analysis." LAHORE JOURNAL OF ECONOMICS 11, no. 2 (2006): 23–41. http://dx.doi.org/10.35536/lje.2006.v11.i2.a2.
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This paper investigates the technical efficiency of selected manufacturing industries of Bangladesh using a stochastic frontier production function approach suggested by Battese and Coelli (1992) applied to panel data. A feasible Cobb-Douglas stochastic frontier production function, which has time-varying technical inefficiency effects, was estimated. Two alternative distributions were used to model the random inefficiency term: a truncated normal distribution and a half-normal distribution. The estimated average technical efficiency for four groups of industries of Bangladesh over the reference period was 40.22% of potential output for the truncated normal distribution, whereas it was 55.57% of potential output for the half-normal distribution.
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Kyshakevych, Bohdan, and Dmytro Mazharov. "A STOCHASTIC FRONTIER ANALYSIS OF UKRAINIAN BANKS EFFICIENCY." Scientific Journal of Polonia University 31, no. 6 (2018): 27–40. http://dx.doi.org/10.23856/3103.
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The authors have developed a model for assessing the Ukrainian banks cost efficiency by means of Stochastic Frontier Analysis, in which the banks are considered as financial intermediaries. On the basis of the likelihood ratio test results the trans-logarithmic function steps forward in the role of the bank’s cost function. In the role of input variables we used the value of fixed assets, the price of labor and price of loanable fund, in the role of output − total loans, other assets and total cost.
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Montigny, Louise de, and Gordon Nigh. "Density Frontiers for Even-Aged Douglas-fir and Western Hemlock Stands in Coastal British Columbia." Forest Science 53, no. 6 (2007): 675–82. http://dx.doi.org/10.1093/forestscience/53.6.675.
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Abstract Douglas-fir (Pseudotsuga menziesii [Mirb.] Franco var. menziesii) and western hemlock (Tsuga heterophylla [Raf.] Sarg.) are the two most common and commercially important species on the coast of British Columbia, Canada. Our research focused on determining the relationship between maximum density and top height for pure stands of these species. These relationships can be used to provide a constraint on mortality functions in individual-tree growth and yield models for even-aged stands. Our data consist of density and top height from experimental plots established along the coast of British Columbia, Washington, and Oregon. These experiments yielded 2,930 observations from 628 plots. We fit stochastic frontier functions to the density/top height data. Stochastic frontier functions have a stochastic component that allows data points to lie on either side of the frontier. The fitting of the frontier functions using maximum likelihood estimation resulted in maximum density lines as an exponential function of top height for both species. The fitted model is based loosely on the −3/2 power thinning law. Our analysis shows that these relationships hold across sites with differing quality. The maximum density line is greater for western hemlock than for Douglas-fir up to a height of about 35 m, at which point they are almost the same. The higher maximum density of western hemlock is likely related to its greater shade tolerance. We used the growth-and-yield model Table Interpolation Program for Stand Yields (TIPSY) to simulate the growth of high-density stands of Douglas-fir and western hemlock. These simulations gave similar results to our fitted density frontier line.
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Ikram, M. Abdul Majid, Andry Prasmuko, Donni Fajar Anugerah, and Ina Nurmalia Kurniati. "ANALISA TINGKAT EFISIENSI SEKTORAL DAN RESPON KEBIJAKAN EKONOMI SEKTORAL DI DAERAH." Buletin Ekonomi Moneter dan Perbankan 14, no. 3 (2012): 317–38. http://dx.doi.org/10.21098/bemp.v14i3.361.
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This paper analyzes the contributon of primary input; capital anda labor, on sectoral performance in Indonesia. The analysis cover sall sectors both in national and regional level, and also the dynamic of input efficiency across period. Using stochastic frontier production function approach, this paper found the aggregate share of capital is 0.20 and 0.34 for labor; conforming the dominance of labor. The highest three technical efficiency is Mining sector (88.65%), Manufacture (70.47%) and Financial (65.93%), while the lowest one is Electric, Gas and Water (25.38%).Keywords: efficiency, stochastic frontier, productivity, Indonesia.JEL Classification: D24, J24, O18
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Ikram, M. Abdul Majid, Andry Prasmuko, Donni Fajar Anugerah, and Ina Nurmalia Kurniati. "ANALYSIS OF SECTORAL EFFICIENCY AND THE RESPONSE OF REGIONAL POLICY." Buletin Ekonomi Moneter dan Perbankan 14, no. 3 (2012): 299–318. http://dx.doi.org/10.21098/bemp.v14i3.406.
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This paper analyzes the contributon of primary input; capital anda labor, on sectoral performance in Indonesia. The analysis cover sall sectors both in national and regional level, and also the dynamic of input efficiency across period. Using stochastic frontier production function approach, this paper found the aggregate share of capital is 0.20 and 0.34 for labor; conforming the dominance of labor. The highest three technical efficiency is Mining sector (88.65%), Manufacture (70.47%) and Financial (65.93%), while the lowest one is Electric, Gas and Water (25.38%). Keywords: efficiency, stochastic frontier, productivity, Indonesia.JEL Classification: D24, J24, O18
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Chaovanapoonphol, Yaovarate, Jittima Singvejsakul, and Songsak Sriboonchitta. "Technical Efficiency of Rice Production in the Upper North of Thailand: Clustering Copula-Based Stochastic Frontier Analysis." Agriculture 12, no. 10 (2022): 1585. http://dx.doi.org/10.3390/agriculture12101585.
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This study examines the efficiency of rice production in Thailand, especially major rice, which is the main crop of farmers in all regions of Thailand and is still a pressing issue. Analyzing technical efficiency by using the appropriate analytical tools inevitably brings about determining the correct production efficiency measures. In this study, we applied the k-means algorithm and copula-based stochastic frontier model to cluster farmer groups in order to find the different factors that impact the group, and to relax the assumption of the two components of random error, which is that they are independent to each other; the correlation of the two components of random error is also represented by the estimation of copula. The findings from the k-means clustering algorithms applied in this study indicate that the production frontiers can be divided into two frontiers, with the number of farmers under the frontiers of such production differing from the number of farmers collected in each area. The production frontiers were obtained with 591 farmers under the first production frontier and 65 farmers under the second. In addition, the results reflected a correlation between the two error components U and V. This suggests inefficiencies and zero-mean, and that the symmetric error is not independent of each other. The findings from the application of the copula-based stochastic frontier production function models indicate that land, cost of chemicals, and labor inputs have significant positive effects on the mean output of major rice in both groups of farmers. Therefore, the results of this study indicate that the financial services in rural areas should be continuously promoted by governmental policy, particularly via agricultural loans, to rural people since the utilization of inputs affects the quantity of rice produced. Timely loans should be encouraged.
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Němec, Daniel. "Measuring Inefficiency of the Czech Labour Market." Review of Economic Perspectives 15, no. 2 (2015): 197–220. http://dx.doi.org/10.1515/revecp-2015-0017.
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Abstract This paper aims to quantify the performance of the Czech regional labour markets and to reveal the most influential economic factors standing behind its dynamics in the last fifteen years. Investigated labour markets are described using matching function approach. The successful matches are treated as an output of production process, where the unemployed are paired with vacancies. Efficiency of this matching process plays an important role in determining unemployment outflows. Using stochastic frontier model approach, dynamics of quantified efficiency terms is revealed and differences among regions are evaluated. The model specification includes a fixed effect term, where individual effect terms and inefficiency terms are estimated jointly. The stochastic frontier is estimated using monthly and quarterly regional panel data of 77 districts for the period 1999-2014. Matching efficiency of the Czech regional labour markets is negatively influenced people who have been unemployed for a long time and by the unemployed aged over 50 years. Although all districts were able to operate at their stochastic frontiers of matching, an upward trend in the inefficiency has been found within the investigated period. These tendencies are accompanied by rising disparities among the regions. Low levels of estimated matching inefficiency do not necessary mean the low unemployment in the corresponding districts.
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Battese, George E. "A Methodological Note on a Stochastic Frontier Model for the Analysis of the Effects of Quality of Irrigation Water on Crop Yields." Pakistan Development Review 37, no. 3 (1998): 293–98. http://dx.doi.org/10.30541/v37i3pp.293-298.
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A stochastic frontier model is proposed for analysis of crop yields, which considers the effects of differing quality of irrigation water, in addition to different inputs and factors associated with technical inefficiency of production. The parameters of the production frontier involved are assumed to be a function of other variables, which measure the quality of the irrigation water.
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Yunus, Ibrahim. "Estimation of technical efficiency of broiler production in Peninsular Malaysia: A stochastic frontier analysis." Journal of Business Management and Accounting 2, no. 1 (2019): 77–95. http://dx.doi.org/10.32890/jbma2012.2.1.7289.
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This study analyzed the technical efficiency of poultry production in Peninsular Malaysia using the stochastic frontier production function analysis. Time series data were collected for this purpose. The frontier function involved variables such as farm, farmer and economic variables. An econometric technique of the stochastic frontier production function approach was applied whereby technical efficiency was measured together with a systemic inefficiency farm in the inefficiency model. The results showed that during the early period, technical progress was rather slow, but subsequently improved during the second period. This is due to changing structure and labor saving technologies which focus towards modernization of the broiler industry. However several policy reforms are needed to enhance the global competitiveness of Malaysian broiler industries especially pertaining to technology policy. It can be concluded that improved extension linkage to sensitize the producers of the need to use new technology such as close house systems. In addition, the government must boost efforts to produce and develop genetically improved breeds of poultry of a higher feed conversion ratio.
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Castaño, Elkin. "A solution for multicollinearity in stochastic frontier production function models." Lecturas de Economía, no. 86 (January 2017): 9–23. http://dx.doi.org/10.17533/udea.le.n86a01.
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Bishop, Paul, and Steven Brand. "The efficiency of museums: a stochastic frontier production function approach." Applied Economics 35, no. 17 (2003): 1853–58. http://dx.doi.org/10.1080/0003684032000158064.
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Hughes, Michael D. "A stochastic frontier cost function for residential child care provision." Journal of Applied Econometrics 3, no. 3 (1988): 203–14. http://dx.doi.org/10.1002/jae.3950030304.
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Wang, Qiong, Chengxuan Geng, Hai-tao E., and Jiarui Song. "Research on capital allocation efficiencies with four-dimensional factor capitals from China’s intelligent manufacturing enterprises." PLOS ONE 17, no. 7 (2022): e0270588. http://dx.doi.org/10.1371/journal.pone.0270588.
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Compared with traditional manufacturing enterprises, intelligent manufacturing enterprises pay more attention to the investment of knowledge capital and technological capital. Taking 258 intelligent manufacturing listed companies in China from 2015 to 2020 as research samples, the paper selects the material capital, human capital, knowledge capital and technological capital of enterprises as the input variables of Cobb-Douglas production function. Considering that enterprises are often affected by spatial correlation, stochastic frontier panel model, spatial lag stochastic frontier panel model and dynamic spatial lag stochastic frontier panel model are constructed to measure capital allocation efficiencies of enterprises. The results show that all the factor capitals in the three models have a significant positive impact on enterprises’ performance, and the dual lag effect of time and space is significant. Moreover, it is more reasonable to use the dynamic spatial lag stochastic frontier panel model to estimate the parameters and measure capital allocation efficiencies. The development of intelligent manufacturing industry has significant space-time spillover effect among provinces. About 52.98% of intelligent manufacturing enterprises have high capital allocation efficiencies, but 12.04% still need to further optimize capital allocation. The gap between the actual performance of the sample enterprises and efficiency frontier is mainly due to technical ineffectiveness. From a regional perspective, the top ten enterprises with high capital allocation efficiencies are all in the eastern region, but the average of capital allocation efficiency is the highest in the western region, followed by the eastern and central regions.
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Gheit, Salem. "A Stochastic Frontier Analysis of the Human Capital Effects on the Manufacturing Industries’ Technical Efficiency in the United States." Athens Journal of Business & Economics 8, no. 3 (2022): 215–38. http://dx.doi.org/10.30958/ajbe.8-3-2.
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This study seeks to establish substantive empirical evidence on the role of college and non-college labour in productivity through technical efficiency in the manufacturing sector in the U.S. economy. This investigation fits a Cobb-Douglas stochastic frontier function with inefficiency effects to a set of panel data for 15 manufacturing industries over the period from 1998 to 2019. The contribution of this paper lies in the application of the stochastic frontier analysis following the approach of Caudill et al. (1995) by estimating and testing stochastic frontier production functions, assuming the presence of heteroscedasticity in the one-sided error term (inefficiency), which provides robust estimates of the technical efficiency measures. This paper also contributes to the literature in the sense that it follows the Hadri (1999) approach and its extension for panel data, Hadri et al. (2003), assuming the existence of heteroscedasticity in both error terms (the one-sided inefficiency term and the two-sided symmetric random noise). The rationale for the double heteroscedasticity estimation is that it results in more accurate measures of the effects of the technical efficiency determinants. Therefore, it adds another layer of confidence in the economic analysis of the impact of human capital components on the manufacturing sector efficiency and by extension, its productivity. The stochastic frontier results show the effects of highly educated workers and low educated workers – proxied by college and non-college labour – on technical inefficiency. This is where the maximum likelihood estimates suggest that the increase in the percentage of the hours worked by college workers tends to contribute positively to technological efficiency in the U.S. manufacturing industries. While on the minus side, it can be noted that the rise in the share of the hours worked by non-college persons seems to have negative impact on efficiency in these industries. JEL Codes: J24, D24, C23, C24, Q12 Keywords: human capital, technical efficiency, stochastic frontier production, double heteroscedasticity, panel data
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O S, Aina, Yakubu S A, Odegbade O O, Dada A A, and Sangodare A O. "Economic efficiency of fish farming in ondo state, nigeria." Journal of Management and Science 11, no. 2 (2021): 40–45. http://dx.doi.org/10.26524/jms.11.13.
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This study assessed economic efficiency of fish farming in Ondo State, Nigeria. The study used primary and secondary data to achieve the objective of the study. Primary data were collected with the aid of structured questionnaire from 72 Fish farmers selected using the multistage sampling technique. The analytical technique involved budgeting technique, stochastic frontier production and cost function analysis. The study discovered from the gross margin and net-revenue analysis that fish production was profitable judging by the positive value and size of the gross margin (₦175.55 per kg) and net revenue (₦170.96 per kg). The result of the stochastic frontier production function analysis showed that all the regressors used in the analysis had positive coefficient, indicating that allthe inputs considered had direct relationship with farmers output. The result of the stochastic cost frontier function analysis showed that unit cost of labour, fingerlings, fertilizer and lime had positive regression coefficients, indicating that as these variables increase,the overall production cost of fish increases. The result also indicated that the presence of technical inefficiency had effects on fish production as depicted by the significant estimated gamma coefficient. The study recommends improvement in human capital development through education policy and training programme by extension education, opening of more market opportunities should be pursued and government should provide support to fish farmer’s cooperative society by increasing their capital base.
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SUSILOWATI, SRI HERY, and NETTI TINAPRILLA. "ANALISIS EFISIENSI USAHA TANI TEBU DI JAWA TIMUR." Jurnal Penelitian Tanaman Industri 18, no. 4 (2020): 162. http://dx.doi.org/10.21082/jlittri.v18n4.2012.162-172.
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<p>ABSTRAK<br />Upaya pengembangan usaha tani tebu masih terkendala bukan<br />hanya oleh ketersediaan lahan namun juga oleh aspek teknis budidaya<br />usaha tani (penggunaan bibit unggul, pemupukan, aspek kelembagaan,<br />dan sebagainya). Selain melalui fasilitasi perluasan lahan, strategi<br />pengembangan tebu harus disertai dengan upaya peningkatan<br />produktivitas, yaitu melalui peningkatan efisiensi usaha tani tebu, atau<br />dengan kata lain bagaimana meningkatkan output maksimum melalui<br />pengelolaan sumberdaya serta teknologi yang ada. Tujuan penelitian<br />adalah untuk menganalisis efisiensi usaha tani tebu dan menentukan<br />faktor-faktor yang mempengaruhi inefisiensi usaha tani tebu. Data yang<br />digunakan adalah data survei PATANAS (Panel Petani Nasional) oleh<br />Pusat Sosial Ekonomi dan Kebijakan Pertanian di Kabupaten Malang<br />dan Lumajang, Jawa Timur tahun 2009. Jumlah contoh sebanyak 132<br />rumah tangga yang dipilih secara acak. Analisis menggunakan stochastic<br />frontier production function approach dengan fungsi produksi Stochastic<br />Frontier Cobb Douglas yang diolah menggunakan program Frontier 4.1.<br />Hasil penelitian menunjukkan nilai indeks efisiensi teknis dikategorikan<br />belum efisien dengan rata-rata efisiensi sebesar 0,672. Variabel akses<br />lahan oleh petani merupakan faktor yang paling penting dan responsif<br />dalam mempengaruhi produksi tebu. Kebijakan pengembangan usaha<br />tani tebu untuk meningkatkan efisiensi usaha tani adalah melalui<br />peningkatan akses lahan, kualitas bibit yang dipakai, dan ketersediaan<br />sarana produksi.<br />Kata kunci : efisiensi teknis, usaha tani tebu, stochastic frontier<br />production function</p><p>ABSTRACT<br />Improving sugar cane farming is still constrained by not only land<br />availability but also technical aspects such as quality of seed, fertilization,<br />institution, etc., so that development strategy to improve sugar cane<br />farming should be conducted by facilitating extensification and<br />increasing productivity and technical efficiency, or in other word<br />increasing maximum output through resource management and<br />technology. The aim of this study was to analyze technical efficieny of<br />sugar cane farming and to identify determinant factors influencing the<br />efficieny of sugar cane farming. This study used PATANAS data survey<br />which was conducted by Indonesian Center for Agriculture Socio<br />Economic and Policy Study (ICASEPS) in Malang and Lumajang<br />Regency, East Java Province in the years of 2009. The 132 samplies of<br />sugarcane household were chosen randomly in the year 2009. Data were<br />analysed using stochastic frontier production function approach with<br />Stochastic Frontier Cobb Douglas using frontier 4.1. programme. The<br />result of this study showed that sugar cane farming in East Java was<br />technically not efficient with the index value of 0.672. Among variables<br />that significantly influenced sugarcane production, land access by<br />farmers was an essential factor to improve production. Policy implication<br />for developing sugar cane farming to improve technical efficiency is by<br />increasing land access, quality of seed, and production factor availability.<br />Key words : technical efficiency, sugarcane farming, stochastic<br />frontier production function</p>
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Mitsel, Arthur, Aliya Alimkhanova, and Marina Grigorieva. "Advancing the multifactor model of Stochastic Frontier Analysis." Eastern-European Journal of Enterprise Technologies 3, no. 4 (111) (2021): 58–64. http://dx.doi.org/10.15587/1729-4061.2021.235316.
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The concept of efficiency is important in economic science; at present, its role in every sector of the economy is growing. Evaluating an enterprise’s efficiency makes it possible to implement a correct and profitable strategy of resource allocation, which shows its potential level Given an annual increase in the number of bankrupt enterprises, the issue of estimating the efficiency of enterprises is relevant for both their owners and managers, as well as for creditors. There are various methods and models for estimating the performance of enterprises. This work has assessed the efficiency of enterprises in the industrial sector over the period of 2017‒2018. Stochastic Frontier Analysis is based on the stochastic model of production function. The classic SFA method is based on the production function of the company, which relates the volume of output to the volume of resources consumed. At the same time, the SFA model uses several inputs (volumes of resources consumed) and only one output parameter ‒ the volume of production. In order to achieve more precise results, a given model has been modified. The model allows several key financial indicators to be taken into consideration as outputs at the same time, based on which the financial activities of the studied economic entities are assessed. The result of the work involving open sources has revealed how the efficiency of different enterprises in the same industry changes over several years. It is shown that the modified Stochastic Frontier Analysis model could be used to assess financial stability and predict bankruptcy.
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Arthur, Mitsel, Alimkhanova Aliya, and Grigorieva Marina. "Advancing the multifactor model of Stochastic Frontier Analysis." Eastern-European Journal of Enterprise Technologies 3, no. 4 (111) (2021): 58–64. https://doi.org/10.15587/1729-4061.2021.235316.
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The concept of efficiency is important in economic science; at present, its role in every sector of the economy is growing. Evaluating an enterprise’s efficiency makes it possible to implement a correct and profitable strategy of resource allocation, which shows its potential level Given an annual increase in the number of bankrupt enterprises, the issue of estimating the efficiency of enterprises is relevant for both their owners and managers, as well as for creditors. There are various methods and models for estimating the performance of enterprises. This work has assessed the efficiency of enterprises in the industrial sector over the period of 2017‒2018. Stochastic Frontier Analysis is based on the stochastic model of production function. The classic SFA method is based on the production function of the company, which relates the volume of output to the volume of resources consumed. At the same time, the SFA model uses several inputs (volumes of resources consumed) and only one output parameter ‒ the volume of production. In order to achieve more precise results, a given model has been modified. The model allows several key financial indicators to be taken into consideration as outputs at the same time, based on which the financial activities of the studied economic entities are assessed. The result of the work involving open sources has revealed how the efficiency of different enterprises in the same industry changes over several years. It is shown that the modified Stochastic Frontier Analysis model could be used to assess financial stability and predict bankruptcy.
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Yakubu, S., Yakubu, S. A., and Sani, M. H. "ESTIMATES OF STOCHASTIC FRONTIER PRODUCTION FUNCTION OF SMALL, MEDIUM AND LARGE-SCALE COWPEA FARMERS IN BAUCHI AND GOMBE STATES OF NIGERIA." Journal of Agripreneurship and Sustainable Development 3, no. 1 (2020): 68–76. http://dx.doi.org/10.59331/jasd.v3i1.103.
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The research was conducted to determine maximum likelihood estimate of stochastic frontier production of small, medium and large-scale cowpea farmers in Bauchi and Gombe States of Nigeria. The major focus was on socio-economic attributes of the small, medium and large-scale cowpea farmers as well as the effects on their efficiency. A total of 323 small, medium and large scale cowpea farmers (i.e., 165 for small, 76 for medium and 82 for large) were selected using ballot box in 10 local government areas of the two States of the study area. Structured questionnaires and interview schedule were used as instruments for data collection. Data were analyzed using descriptive and Stochastic Frontier Analysis (SFA). The mean scores for small, medium and large-scale cowpea farmers in respect to ages, household size and farming experiences were 46, 44 and 47 years, 16, 17 and 19 persons and 12, 14 and 16 years, respectively. The Maximum Likelihood Estimates (MLE) result of the stochastic frontier production function (SFPF) for cowpea farmers indicated the presence of inefficiency. Farm size and herbicide were significant at P>0.001, seed (P>0.05) and family labour at P>0.01. In the efficiency effects, farming experience and household size were both significant at P>0.001; and extension contact and literacy level were significant at P>0.05, respectively.
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Adri, Adri, Firdaus Firdaus, Suharyon Suharyon, et al. "ESTIMATION OF RICE SEED PRODUCTION EFFICIENCY USING THE STOCHASTIC FRONTIER PRODUCTION FUNCTION." Jurnal Ilmiah Ilmu Terapan Universitas Jambi 7, no. 2 (2023): 150–58. http://dx.doi.org/10.22437/jiituj.v7i2.30412.
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Production efficiency is a crucial factor in producing seeds. This paper aims to estimate the level of efficiency of rice seed production and determine the factors that influence it using a frontier stochastic production function approach. The rice varieties developed are Inpara3, Inpari Nutri Zink and Baroma. The research was conducted in Rawa Medang Village, Batang Asam District, West Tanjung Jabung Regency, Jambi Province, in December 2021. Data collection was carried out through observation and in-depth interviews with seed breeders. By using the frontier production function, the conclusion is obtained: The efficiency level of rice farming for superior varieties is relatively good, with the efficiency level at level 6. All rice seed breeders show effective performance. To increase the efficiency of rice farming in the future, it is necessary to sharpen the use of production input inputs. The consideration is that the breeder's orientation is to produce quality seed for use by the farming community. Therefore, more intensive technological assistance is needed.
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Beckers, Dominique E., and Christopher J. Hammond. "A tractable likelihood function for the normal-gamma stochastic frontier model." Economics Letters 24, no. 1 (1987): 33–38. http://dx.doi.org/10.1016/0165-1765(87)90177-7.
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Pevcin, Primož. "Costs and Efficiency of Municipalities in Slovenia." Lex localis - Journal of Local Self-Government 11, no. 3 (2013): 531–43. http://dx.doi.org/10.4335/11.3.531-543(2013).
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This paper empirically analyses average costs function and technical efficiency for 200 Slovenian municipalities in the year 2011. The methodology is based on the econometric estimation of the average costs function and stochastic parametric analysis of best-practice frontier to address technical inefficiencies. The results reveal that the average costs function for Slovenian municipalities is U-shaped, and the estimated least-cost size of the municipality implies that the current number of municipalities is not optimal. Besides, the average technical efficiency of Slovenian municipalities is approximately 22-25% above estimated best-practice frontier. Following, the issues related to municipal consolidation and increased efficiency should be promoted.
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Ibrahim, Ibrahim Elnour. "Economic Efficiency of Sorghum and Millet Production for Small Scale Farmers in Traditional Rainfed, North Kordofan State, Sudan." Turkish Journal of Agriculture - Food Science and Technology 6, no. 2 (2018): 150. http://dx.doi.org/10.24925/turjaf.v6i2.150-155.1490.
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The purpose of this study was to measure and analyse the economic efficiency, and to identify the main factor behind economic efficiency of sorghum and millet for small scale farmers in traditional rainfed sector in North Kordofan State. Primary data is collected using structured questionnaire for a sample of 205 farmers from four localities namely (Sheikan, Umrwaba, Elnuhoud, and Elkhowi). Stochastic frontier approach (cost function) was used to analyse economic efficiency and descriptive statistics were used to analyse socio-economic characteristics of farmers. The results of stochastic frontier cost function revealed that the estimated economic efficiency of the sorghum and millet farmers obtained was found the mean economic efficiency to be 39% and 15%, respectively. The economic efficiency is very weak, because most parameters and inefficiency effect factor found to be not significant, these determinants may give a clear picture of farmers that could be targeted in order to increase efficiency
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Baten, M. A., and A. A. Kamil. "A stochastic frontier model for measuring online bank profit efficiency." South African Journal of Business Management 42, no. 3 (2011): 49–60. http://dx.doi.org/10.4102/sajbm.v42i3.499.
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This study revisited an alternative profit efficiency function specified by Berger & Mester, (1997) and we applied Battese & Coelli, (1995) inefficiency model as a unified and consistent framework in exploring the determinants of important factors causing profit efficiency differential on banking industry in Bangladesh. Using stochastic frontier technique we estimated bank specific profit efficiency for the period 2000 to 2007. This study attempted to examine the changes in the profit efficiency in accordance with NBs (Nationalized Commercial Banks), ISBs (Islamic Banks), FBs (Foreign Banks) and PBs (Private Banks) and significant variations of efficiencies across different kinds of banks in time periods. We found that the profit inefficiency has declined over the reference period and Translog Production Function is more preferable than Cobb-Douglas Production Function. Our results showed that Nationalized Commercial Banks were significantly inefficient and on the contrary ISBs, FBs, and PBs were efficient in producing profit and noteworthy. The estimated year wise average efficiencies of the sample banks from the profit efficiency model was 0.664 while group wise average profit efficiency was 0,639. Dhaka Bank is highly efficient with score 0.89 and AB Bank was found lowest efficient with score 0,35 according to the sample data.
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Jilhajj, Khondokar. "Profit Efficiency of Bangladeshi Banks: A Stochastic Frontier Approach." International Journal of Economics and Financial Issues 13, no. 4 (2023): 73–83. http://dx.doi.org/10.32479/ijefi.14420.
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This paper examines the profit efficiency of the banks in Bangladesh using the stochastic frontier analysis. The paper is prepared based on the secondary data only and the sample contains data from 25 banks including state owned and private conventional banks in Bangladesh from the year 2011 to 2020. Translog function has been employed to construct the profit function and Battese and Coelli 1995 (BC95) model has been used to determine the profit efficiency. The efficiency performance reveals that, on average, banks in Bangladesh are 80.73% profit efficient. Dutch-Bangla Bank Limited (DBBL) is the most profit efficient banks with a score of 92.56% in 2020. While Dhaka Bank is the least profit efficient banks with a score of 15.42%. Banks belong to the 3rd and 2nd generation are the most profit efficient. Besides, none of the inefficiency determinant is statistically significant to explain variation in the profit inefficiency as the dataset is small and only limited to Bangladeshi banks. Moreover, diagnostic tests such as Normality test, M3T statistics test and Likelihood Ratio (LR) test have been performed to confirm the existence of inefficiency. This report shall provide important insight of state owned and private conventional banks in Bangladesh to the managements, regulators and other concerned parties.
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Guha, Pradyut, and Tiken Das. "Determinants of Cost Inefficiency of Maize Farming in Different Agro-climatic Regions of Sikkim, India." International Journal of Rural Management 16, no. 2 (2020): 177–98. http://dx.doi.org/10.1177/0973005220942612.
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The present study makes an attempt to analyse farm level cost inefficiency of maize farming and its determinants in different agro-climatic regions of Sikkim. The primary data for the study were collected during the third and fourth quarter of 2018 from different agro-climatic regions of Sikkim. Both data envelopment and stochastic frontier analysis were used for measurement of the farm level inefficiency across different agro-climatic regions of the study area. Based on the Cobb–Douglas cost function for maize output, the article simultaneously estimated stochastic frontier cost function and examined the effect of exogenous factors on farm level cost inefficiency. The results of this study showed that, on an average, the farmer incurred cost which was 8 per cent to 72 per cent above the minimum cost defined by the best practice frontier. Further, cost inefficiency was relatively higher among the farmers in temperate agro-climatic region. Greater cost inefficiency seems to be directly associated with remoteness of farmland from input market. The study also found that the additional years of farming experience and farming in the rented plots were useful in reducing cost inefficiency.
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& et al., Al-Hachami. "MEASURING THE TECHNICAL EFFICIENCY OF POTATO PRDUCTION AND ITS DETERMINATS IN IRAQ (BAGHDAD PROVINCE AS CASE STUDY)." IRAQI JOURNAL OF AGRICULTURAL SCIENCES 51, no. 6 (2020): 1634–43. http://dx.doi.org/10.36103/ijas.v51i6.1190.
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This study aimed to estimate the stochastic frontier production function and the inefficiency function and technical efficiency of potato production by using cross-section data collected from 173 potato farms that were randomly selected in Baghdad province/ Yusifiyah for production season 2016. The results showed that 90.6% of inefficiency in production was due to technical inefficiency. Also, there was a significant relationship between the variables of inefficiency function and the inefficiency of farms. The values of the parameters of the stochastic frontier production function were positive and significant for both human work hours and the amount of seeds. However, the parameter of DAP fertilizer was negative and significant. The estimation of the technical inefficiency function showed that its parameters were significant for both the local seed provider and the agricultural season (fall), while the parameters experience in growing potatoes and the number of irrigations were significant and their impact was negative on the inefficiency. The results also showed that the technical efficiency of the study sample (50%) on average. The researchers recommended the necessity of providing imported seed tubers for the increased productivity in dunum to achieve technical efficiency.