"Estimation of Nonparametric Stochastic Cost Frontier Models under Economic Constraints"

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Dr. KIEN C. TRAN (Department of Economics, University of Lethbridge)

will deliver a talk entitled:

"ESTIMATION OF NONPARAMETRIC STOCHASTIC COST FRONTIER MODELS UNDER ECONOMIC CONSTRAINTS"

on Friday, January 20th from 2:30 - 4:00 p.m. in B-756 (University Hall)

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Monotonicity, linear homogeneity and concavity are the three main properties of any cost function under economic theory.  Thus, in practice, it is essential to include these properties in the cost estimation, especially when the cost function is modelled nonparametrically.  In this paper, we show how to estimate the nonparametric stochastic cost frontier models under these economic restrictions.  We present a relatively fast converging backfitting algorithm that is fairly simple to compute in practice.  Monte Carlo simulations results suggest that the proposed algorithm works well in finite sample.  An empirical application of large U.S. commercial banks is used to demonstrate the usefulness of the proposal approach.

!!! EVERYONE IS WELCOME !!!

 

Room or Area: 
B-756

Contact:

Merle Christie | christie@uleth.ca | (403) 329-2518