Estimation of Input Distance Functions: A System Approach
提出一种系统方法解决投入距离函数中投入的内生性问题，通过联立方程模型同时估计技术效率和配置效率，并应用于挪威奶牛场数据，发现1997年配额改革显著提升了技术效率。
This article offers a methodology to address the endogeneity of inputs in the input distance function (IDF) formulation of the production processes. We propose to tackle endogenous input ratios appearing in the normalized IDF by considering a flexible (simultaneous) system of the IDF and the first‐order conditions from the firm's cost minimization problem. Our model can accommodate both technical and (input) allocative inefficiencies among firms. We also present the algorithm for quantifying the cost of allocative inefficiency. We showcase our cost‐system‐based model by applying it to study the production of Norwegian dairy farms during the 1991–2008 period. Among other things, we find both an economically and statistically significant improvement in the levels of technical efficiency among dairy farms associated with the 1997 quota scheme change, which a more conventional single‐equation stochastic frontier model appears to be unable to detect.