Modified Fixed Effects Estimation of Technical Inefficiency
2013 (English)Report (Other academic)
We consider method of moment ﬁxed eﬀects (FE) estimation of technical ineﬃciency. When N, the number of cross sectional observations, is large it ispossible to obtain consistent central moments of the population distribution of the ineﬃciencies. It is well-known that the traditional FE estimator may be seriously upward biased when N is large and T, the number of time observations, is small. Based on the second central moment and a single parameter distributional assumption on the ineﬃciencies, we obtain unbiased technical ineﬃciencies in large N settings. The proposed methodology bridges traditional FE and maximum likelihood estimation – bias is reduced without the random eﬀects assumption.
Place, publisher, year, edition, pages
Borlänge: Högskolan Dalarna , 2013. , 10 p.
Working papers in transport, tourism, information technology and microdata analysis, ISSN 1650-5581 ; 2013: 21
Technical output inefficiency, Fixed effects estimator, Panel data, Method of moments
Research subject Komplexa system - mikrodataanalys
IdentifiersURN: urn:nbn:se:du-12793OAI: oai:DiVA.org:du-12793DiVA: diva2:642647