The Spatial Efficiency Multiplier and Random Effects
Mon, 07 Nov 2016 13:07:00 GMT
Quantitative Analysis of Business, Economics and Finance (QABEF) Research Group Seminar
Speaker: Dr. Karligash Glass – Loughborough University
Wed, 16 Nov 2016, 13:15, BSG/20
All staff and students welcome
The Spatial Efficiency Multiplier and Random Effects in Spatial Stochastic Frontier Models
We extend the emerging literature on spatial frontier models in three respects. Firstly, we account for latent heterogeneity by developing a maximum likelihood random effects spatial autoregressive (SAR) stochastic frontier model. Secondly, to analyze the finite sample properties of a spatial stochastic frontier model we develop a Monte Carlo experimental methodology which we then apply. Thirdly, we introduce the concept of the spatial efficiency multiplier to show that the efficiency benchmark for a productive unit from the structural form of a spatial stochastic frontier model differs from the efficiency benchmark from the reduced form of the model.
