Comparison Of Stochastic Frontier Approaches For Estimating National Efficiency: An Application To Sub-Saharan African Countries
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Date
2018
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Journal ISSN
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Publisher
Journal Of Economic Development
Abstract
In this paper, we attempt to estimate pure national (technical) efficiency for 19 SSA
countries over the 1960-2010 period. In doing this, we compare conventional stochastic
frontier models for panel data with several recently developed models that seek to
control for unobserved heterogeneity in the inefficiency component. We find that the ‘true’
random effects model that treats unobserved heterogeneity in our national dataset generates
more reasonable efficiency estimates. Moreover, the results confirm that most SSA countries
operate far from the efficient frontier.
Description
Research Article
Keywords
National Efficiency, Productivity, Stochastic Frontier Model, Sub-Saharan Africa