Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
9555334 | Journal of Econometrics | 2005 | 30 Pages |
Abstract
In this paper, we propose simulation-based Bayesian inference procedures in a cost system that includes the cost function and the cost share equations augmented to accommodate technical and allocative inefficiency. Markov chain Monte Carlo techniques are proposed and implemented for Bayesian inferences on costs of technical and allocative inefficiency, input price distortions and over- (under-) use of inputs. We show how to estimate a well-specified translog system (in which the error terms in the cost and cost share equations are internally consistent) in a random effects framework. The new methods are illustrated using panel data on U.S. commercial banks.
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Physical Sciences and Engineering
Mathematics
Statistics and Probability
Authors
Subal C. Kumbhakar, Efthymios G. Tsionas,