Neoclassical versus frontier production models? Testing for the skewness of regression residuals
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Neoclassical versus frontier production models? Testing for the skewness of regression residuals. / Kuosmanen, Timo; Fosgerau, Mogens.
I: Scandinavian Journal of Economics, Bind 111, Nr. 2, 2009, s. 351-367.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - Neoclassical versus frontier production models? Testing for the skewness of regression residuals
AU - Kuosmanen, Timo
AU - Fosgerau, Mogens
PY - 2009
Y1 - 2009
N2 - The empirical literature on production and cost functions is divided into two strands. The neoclassical approach concentrates on model parameters, while the frontier approach decomposes the disturbance term to a symmetric noise term and a positively skewed inefficiency term. We propose a theoretical justification for the skewness of the inefficiency term, arguing that this skewness is the key testable hypothesis of the frontier approach. We propose to test the regression residuals for skewness in order to distinguish the two competing approaches. Our test builds directly upon the asymmetry of regression residuals and does not require any prior distributional assumptions.
AB - The empirical literature on production and cost functions is divided into two strands. The neoclassical approach concentrates on model parameters, while the frontier approach decomposes the disturbance term to a symmetric noise term and a positively skewed inefficiency term. We propose a theoretical justification for the skewness of the inefficiency term, arguing that this skewness is the key testable hypothesis of the frontier approach. We propose to test the regression residuals for skewness in order to distinguish the two competing approaches. Our test builds directly upon the asymmetry of regression residuals and does not require any prior distributional assumptions.
KW - Firms and production
KW - Frontier estimation
KW - Hypothesis testing
KW - Production function
KW - Productive efficiency analysis
UR - http://www.scopus.com/inward/record.url?scp=65449121015&partnerID=8YFLogxK
U2 - 10.1111/j.1467-9442.2009.01567.x
DO - 10.1111/j.1467-9442.2009.01567.x
M3 - Journal article
AN - SCOPUS:65449121015
VL - 111
SP - 351
EP - 367
JO - Scandinavian Journal of Economics
JF - Scandinavian Journal of Economics
SN - 0347-0520
IS - 2
ER -
ID: 181872812