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Articles 1 - 8 of 8
Full-Text Articles in Social and Behavioral Sciences
Calculating Efficiency For Spatial Autoregressive Stochastic Frontier Model, Levent Kutlu
Calculating Efficiency For Spatial Autoregressive Stochastic Frontier Model, Levent Kutlu
Economics and Finance Faculty Publications and Presentations
When there are efficiency spillovers, we can use a spatial autoregressive stochastic frontier model to estimate total (spillover-corrected) efficiencies. Glass et al. (2016) provide a formula for total efficiency in this context, which is an approximation. We provide the exact formula for the spillover-corrected efficiency. Moreover, we derive total, direct, and indirect marginal effects of environmental variables on spillover-corrected efficiency.
The Effect Of Corruption Control On Efficiency Spillovers, Levent Kutlu, Xi Mao
The Effect Of Corruption Control On Efficiency Spillovers, Levent Kutlu, Xi Mao
Economics and Finance Faculty Publications and Presentations
We examine the effect of corruption control on efficiency and its implications for efficiency spillovers by a stochastic frontier model. Our dataset covers 102 countries from 1996 to 2014. We find a positive relationship between corruption control and efficiency. If neighboring countries have difficulty in handling corruption, the country would be negatively affected by its neighbors' corruption through efficiency spillovers. We then compare the efficiency differences across countries for three time periods: 1996–2002, 2002–2008, and 2008–2014. On average, technical efficiencies slightly increased in the second period compared to the first period. In the third period, the efficiencies declined, particularly in …
Locating An Optimal Site For A Controversial Facility, Jean-Baptiste Tondji
Locating An Optimal Site For A Controversial Facility, Jean-Baptiste Tondji
Economics and Finance Faculty Publications and Presentations
We consider a situation in which policymakers in a local community have to choose an optimal site for a controversial and essential project in a democratic setting. Policymakers have either single-dipped or multi-dipped preferences over a Euclidean space of possible locations. We provide two existence results for this issue. There exists at most two optimal sites if the size of policymakers is odd, and they have single-dipped preferences over a one-dimensional site space.
Estimation Of Cost Efficiency Without Cost Data, Levent Kutlu, Ran Wang
Estimation Of Cost Efficiency Without Cost Data, Levent Kutlu, Ran Wang
Economics and Finance Faculty Publications and Presentations
One of the advantages of conduct parameter games is that they enable estimation of market power without total cost data. In line with this, we develop a conduct parameter based model to estimate the firm specific “marginal cost efficiency” and conduct without using total cost data. The marginal cost efficiency is an alternative measure of efficiency that is based on deadweight loss. We illustrate our methodology by estimating firm-route-quarter specific conducts and marginal cost efficiencies of U.S. airlines for Chicago based routes without using route-level total cost data.
Estimating Efficiency In A Spatial Autoregressive Stochastic Frontier Model, Levent Kutlu
Estimating Efficiency In A Spatial Autoregressive Stochastic Frontier Model, Levent Kutlu
Economics and Finance Faculty Publications and Presentations
The spatial autoregressive stochastic frontier model of Glass et al.(2016) is based on distributional assumptions on two-sided and one-sided error terms. After estimating the model parameters, the efficiency estimates need to be corrected due to the presence of spatial autoregressive term in their model. Glass et al.(2016) estimate the corrected efficiencies by employing ideas from a distribution-free method on the efficiency estimation, which may be sensitive to outliers. We propose an alternative way to correct efficiency estimates that is in line with the distribution-based methods.
School District Consolidation Policies: Endogenous Cost Inefficiency And Saving Reversals, Mustafa U. Karakaplan, Levent Kutlu
School District Consolidation Policies: Endogenous Cost Inefficiency And Saving Reversals, Mustafa U. Karakaplan, Levent Kutlu
Economics and Finance Faculty Publications and Presentations
Some education policy studies suggest that consolidation of public school districts saves resources. However, endogeneity in cost models would result in incorrect estimates of the effects of consolidation. We use a new stochastic frontier methodology to examine district expenditures while handling endogeneity. Using the data from California, we find that the effects of student achievement and education market concentration on expenditure per pupil are substantially larger when endogeneity is handled. Our findings are robust to concerns such as instrumental variable adequacy and spatial interactions. Our consolidation simulations indicate that failure to address endogeneity can result in unrealistic expectations of savings.
Endogeneity In Panel Stochastic Frontier Models: An Application To The Japanese Cotton Spinning Industry, Mustafa U. Karakaplan, Levent Kutlu
Endogeneity In Panel Stochastic Frontier Models: An Application To The Japanese Cotton Spinning Industry, Mustafa U. Karakaplan, Levent Kutlu
Economics and Finance Faculty Publications and Presentations
We present a panel stochastic frontier model that handles the endogeneity problem. This model can treat the endogeneity of both frontier and inefficiency variables. We apply our method to examine the technical efficiency of Japanese cotton spinning industry. Our results indicate that market concentration is endogenous, and when its endogeneity is properly handled, it has a larger negative impact on the technical efficiency of cotton spinning plants. We find that the exogenous model substantially overestimates efficiency in concentrated markets.
Battese-Coelli Estimator With Endogenous Regressors, Levent Kutlu
Battese-Coelli Estimator With Endogenous Regressors, Levent Kutlu
Economics and Finance Faculty Publications and Presentations
We provide a framework for dealing with the endogeneity problem in the Battese-Coelli estimator for productive efficiency measurement.