Handling Losses in Translog Profit Models

J.W.B. Bos, M. Koetter

Research output: Working paperAcademic

Abstract

In this paper, we compare standard approaches used to handle losses in logarithmic stochastic profit frontier models with a simple novel approach. We discuss discriminatory power, rank stability and precision of profit efficiency scores. Our new method enhances rank stability and discriminatory power, and improves the precision of profit efficiency scores.
Original languageEnglish
Place of PublicationUtrecht
PublisherUU USE Tjalling C. Koopmans Research Institute
Number of pages10
Publication statusPublished - Jun 2007

Publication series

NameDiscussion Paper Series / Tjalling C. Koopmans Research Institute
No.17
Volume07
ISSN (Electronic)2666-8238

Keywords

  • Profit Efficiency
  • Stochastic Frontier Analysis
  • Truncation
  • Censoring

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