Journal of Statistical and Econometric Methods

Interpreting Stochastic Frontier Model as Random Coefficient Model and Vice Versa

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• Abstract

  
  

  This note explores the relationship between the stochastic frontier model and the random coefficient regression model. It shows how to interpret the former as a special case of the latter and vice versa.

   

  JEL classification numbers: C13, C51, D24.

  Keywords: Stochastic production frontier, Random coefficient regression, Composite error, Technical inefficiency.