Skip to main content
SpringerLink
Log in

On the choice of functional form in stochastic frontier modeling

  • Published:
Empirical Economics Aims and scope Submit manuscript

Abstract.

This paper examines the effect of functional form specification on the estimation of technical efficiency using a panel data set of 125 olive-growing farms in Greece for the period 1987–93. The generalized quadratic Box-Cox transformation is used to test the relative performance of alternative, widely used, functional forms and to examine the effect of prior choice on final efficiency estimates. Other than the functional specifications nested within the Box-Cox transformation, the comparative analysis includes the minflex Laurent translog and generalized Leontief that possess desirable approximation properties. The results indicate that technical efficiency measures are very sensitive to the choice of functional specification. Perhaps most importantly, the choice of functional form affects the identification of the factors affecting individual performance – the sources of technical inefficiency. The analysis also shows that while specification searches do narrow down the set of feasible alternatives, the identification of the most appropriate functional specification might not always be (statistically) feasible.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Author information

Authors and Affiliations

  1. Department of Agricultural Economics, University of Nebraska-Lincoln, 216 H. C. Filley Hall, Lincoln, NE 68583-0922, USA (E-mail: kgiannakas@unl.edu), , , , , , US

    Konstantinos Giannakas

  2. Department of Economics, University of Saskatchewan, 9 Campus Drive, Saskatoon, Saskatchewan, S7N 5A5, Canada (E-mail: trank@sask.usask.ca), , , , , , CA

    Kien C. Tran

  3. Department of Economics, University of Crete, University Campus, Rethymno, Crete, 74 100, Greece (E-mail: Vangelis@cha.forthnet.gr), , , , , , GR

    Vangelis Tzouvelekas

Authors
  1. Konstantinos Giannakas
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Kien C. Tran
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Vangelis Tzouvelekas
    View author publications

    You can also search for this author in PubMed Google Scholar

Additional information

First version received: November 1999/Final version received: July 2001

RID="*"

ID="*"  The authors wish to thank Almas Heshmati, Robert Romain, and an anonymous referee for insightful comments and suggestions. Special thanks go to the associate editor who handled the paper, and whose careful reading and suggestions have improved the paper substantially. The second author wishes to acknowledge the financial support from “President SSHRC” from the University of Saskatchewan. The usual caveats with respect to opinions expressed in the paper apply. Senior authorship is shared. This is University of Nebraska-Lincoln Agricultural Research Division Article No. 13270.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Giannakas, K., Tran, K. & Tzouvelekas, V. On the choice of functional form in stochastic frontier modeling. Empirical Economics 28, 75–100 (2003). https://doi.org/10.1007/s001810100120

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/s001810100120

Search

Navigation