Estimation of semiparametric stochastic frontiers under shape constraints with application to pollution generating technologies Report as inadecuate




Estimation of semiparametric stochastic frontiers under shape constraints with application to pollution generating technologies - Download this document for free, or read online. Document in PDF available to download.

Abstract

A number of studies have explored the semi- and nonparametric estimation of stochasticfrontier models by using kernel regression or other nonparametric smoothing techniques.In contrast to popular deterministic nonparametric estimators, these approaches do notallow one to impose any shape constraints or regularity conditions on the frontierfunction. On the other hand, as many of the previous techniques are based on thenonparametric estimation of the frontier function, the convergence rate of frontierestimators can be sensitive to the number of inputs, which is generally known as -thecurse of dimensionality- problem. This paper proposes a new semiparametric approachfor stochastic frontier estimation that avoids the curse of dimensionality and allows one toimpose shape constraints on the frontier function. Our approach is based on the singleindexmodel and applies both single-index estimation techniques and shape-constrainednonparametric least squares. In addition to production frontier and technical efficiencyestimation, we show how the technique can be used to estimate pollution generatingtechnologies. The new approach is illustrated by an empirical application to theenvironmental adjusted performance evaluation of U.S. coal-fired electric power plants.



Item Type: MPRA Paper -

Original Title: Estimation of semiparametric stochastic frontiers under shape constraints with application to pollution generating technologies-

Language: English-

Keywords: stochastic frontier analysis SFA, nonparametric least squares, single-index model, sliced inverse regression, monotone rank correlation estimator, environmental efficiency-

Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and EstimationQ - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q52 - Pollution Control Adoption and Costs ; Distributional Effects ; Employment EffectsC - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C14 - Semiparametric and Nonparametric Methods: GeneralD - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity-





Author: Kortelainen, Mika

Source: https://mpra.ub.uni-muenchen.de/9257/







Related documents