New insights into the stochastic ray production frontier
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New insights into the stochastic ray production frontier. / Henningsen, Arne; Bělín, Matěj ; Henningsen, Géraldine.
Department of Food and Resource Economics, University of Copenhagen, 2017.Research output: Working paper › Research
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TY - UNPB
T1 - New insights into the stochastic ray production frontier
AU - Henningsen, Arne
AU - Bělín, Matěj
AU - Henningsen, Géraldine
PY - 2017
Y1 - 2017
N2 - The stochastic ray production frontier was developed as an alternative to the traditional output distance function to model production processes with multiple inputs and multiple outputs. Its main advantage over the traditional approach is that it can be used when some output quantities of some observations are zero. In this paper, we briefly discuss—and partly refute—a few existing criticisms of the stochastic ray production frontier. Furthermore, we discuss some shortcomings of the stochastic ray production frontier that have not yet been addressed in the literature and that we consider more important than the existing criticisms: taking logarithms of the polar coordinate angles, non-invariance to units of measurement, and ordering of the outputs. We also give some practical advice on how to address the newly raised issues.
AB - The stochastic ray production frontier was developed as an alternative to the traditional output distance function to model production processes with multiple inputs and multiple outputs. Its main advantage over the traditional approach is that it can be used when some output quantities of some observations are zero. In this paper, we briefly discuss—and partly refute—a few existing criticisms of the stochastic ray production frontier. Furthermore, we discuss some shortcomings of the stochastic ray production frontier that have not yet been addressed in the literature and that we consider more important than the existing criticisms: taking logarithms of the polar coordinate angles, non-invariance to units of measurement, and ordering of the outputs. We also give some practical advice on how to address the newly raised issues.
M3 - Working paper
T3 - IFRO Working Paper
BT - New insights into the stochastic ray production frontier
PB - Department of Food and Resource Economics, University of Copenhagen
ER -
ID: 174627675