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Modified fixed effects estimation of technical inefficiency
Dalarna University, School of Technology and Business Studies, Statistics.ORCID iD: 0000-0003-4378-9593
2016 (English)In: Journal of Productivity Analysis, ISSN 0895-562X, E-ISSN 1573-0441, Vol. 46, no 1, 83-86 p.Article in journal (Refereed) PublishedText
Abstract [en]

We consider method-of-moments fixed effects (FE) estimation of technical inefficiency. When dealing with a large number of cross-sectional observations, N, it is possible to obtain consistent moment estimators of the inefficiency distribution. It is well known that the classical FE estimator may be seriously upward biased when N is large and T, the number of time observations, is small. The method-of-moments FE estimators do not suffer from this type of bias in large-N settings. The proposed methodology bridges classical FE and maximum likelihood estimation, leading to a reduction in bias without making the random effects assumption.

Place, publisher, year, edition, pages
2016. Vol. 46, no 1, 83-86 p.
Keyword [en]
Technical inefficiency, Fixed effects estimator, Method of moments
National Category
Business Administration
Research subject
Complex Systems – Microdata Analysis
URN: urn:nbn:se:du-22663DOI: 10.1007/s11123-016-0473-3ISI: 000379172500006OAI: oai:DiVA.org:du-22663DiVA: diva2:950898
Available from: 2016-08-03 Created: 2016-08-03 Last updated: 2016-09-01Bibliographically approved

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Wikström, Daniel
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