Research Article
Two-tier stochastic frontier analysis: heterogeneous error distributions and model selection
https://doi.org/10.21203/rs.3.rs-4437203/v1
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We develop two-tier stochastic frontier models where the two one-sided error components follow different marginal distributions. As estimation methods, we present both Simulated Maximum Likelihood and Corrected Ordinary Least Squares coupled with Generalized Method of Moments. We propose a formal statistical test as well as informal diagnostics to choose between specifications. An application illustrates the use of these new tools.
JEL classification D24 C46 C21
stochastic frontier analysis
distribution mode
simulated maximum likelihood
two-tier stochastic frontier
No competing interests reported.
Reviews received at journal
26 May, 2024
Reviewers agreed at journal
23 May, 2024
Reviewers agreed at journal
23 May, 2024
Reviewers invited by journal
22 May, 2024
Editor assigned by journal
19 May, 2024
Submission checks completed at journal
18 May, 2024
First submitted to journal
17 May, 2024
You are reading this latest preprint version