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THE STOCHASTIC FRONTIER MODEL OF TECHNICAL EFFICIENCY: AN APPLICATION

GLENVILLE RAWLINS (Assistant Professor of Economics, Montclair State College.)

Studies in Economics and Finance

ISSN: 1086-7376

Article publication date: 1 January 1985

102

Abstract

A firm is technically efficient when it produces the maximum level of output for a given level of input on the assumption that technology is fixed. Although the above definition of technical efficiency has been around for decades, economists have, for the most part, been estimating average production functions (i.e. production functions that assume that all firms are technically efficient except for random noise), and then proceeding to make inferences regarding the potential of firms from this average production function.

Citation

RAWLINS, G. (1985), "THE STOCHASTIC FRONTIER MODEL OF TECHNICAL EFFICIENCY: AN APPLICATION", Studies in Economics and Finance, Vol. 9 No. 1, pp. 29-55. https://doi.org/10.1108/eb028652

Publisher

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MCB UP Ltd

Copyright © 1985, MCB UP Limited

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