scholarly journals Modeling Spatial Interaction in Stochastic Frontier Analysis

2021 ◽  
Vol 5 ◽  
Author(s):  
Francisco J. Areal ◽  
Valerien O. Pede
Keyword(s):  
Spatial Heterogeneity ◽  
Stochastic Frontier Analysis ◽  
Unobserved Heterogeneity ◽  
Spatial Interaction ◽  
Stochastic Frontier ◽  
The Philippines ◽  
Rice Farming ◽  
Analysis Framework ◽  
Frontier Analysis ◽  
Unobserved Effects

We compare farm level efficiency rankings derived from non-spatial and a variety of spatial model specifications that account for unobserved heterogeneity in both the production and the efficiency sides of the stochastic frontier model in an empirical application on rice farming in the Philippines. We show how not accounting for unobserved spatial heterogeneity affects efficiency estimates and farm efficiency rankings. When not accounting for unobserved spatial heterogeneity efficiency, models show farms to be relatively more inefficient than they actually are (i.e., once unobserved spatial heterogeneity is incorporated in the models). More importantly from a policy perspective, the rankings of the farms in terms of efficiency are altered once unobserved spatial heterogeneity is incorporated in efficiency models. We recommend the use of unobserved effects in both production and efficiency within the stochastic frontier analysis framework to avoid making any misleading recommendations to farmers and policymakers.

Performance analysis of electricity distribution sector post the implementation of electricity act 2003: empirical evidence from India

2020 ◽  
Vol 17 (5) ◽  
pp. 669-696
Author(s):  
Pavan Khetrapal
Keyword(s):  
Stochastic Frontier Analysis ◽  
Corporate Strategy ◽  
Unobserved Heterogeneity ◽  
Stochastic Frontier ◽  
Operational Efficiency ◽  
Electricity Distribution ◽  
Content Type ◽  
Frontier Analysis ◽  
Explanatory Variables ◽  
Utility Managers

PurposeThe objective of the present study is to evaluate and analyse the performance of Indian electricity distribution utilities post the implementation of landmark Electricity Act 2003.Design/methodology/approachStochastic frontier analysis (SFA) that incorporates exogenous influences on operational efficiency is adopted in the present study. Specifically, a stochastic frontier production function model with a technical inefficiency effects model (Battese and Coelli, 1995) is chosen as a preferred model. In this model, the function that explains the inefficiency scores is estimated in a single stage with the production technology. This avoids the problem of inconsistency which is possible in the two-stage approach.FindingsThe sample involved 52 Indian electricity distribution utilities for seven-year period from 2006 to 2013. Major findings of SFA show that Indian electricity distribution utilities post the implementation of Electricity Act (2003) had, on average, experienced efficiency improvement during the observed period. The overall mean technical effciency score is estimated as 78.5% which indicates that there exist wide scope for effciency improvement in the sector. Further, the empirical findings also indicate that publicly owned distribution utilities obtain average technical efficiencies of 71.3%, which is lower than privately owned distribution utilities, which achieve average technical efficiencies of 85.7%.Research limitations/implicationsPower supply quality indicators such as SAIFI, SAIDI, CAIFI, etc. and unobserved heterogeneity also influence the efficiency analysis of electricity distribution utilities. Hence, these parameters as explanatory variables can be incorporated in the future work.Practical implicationsThe results obtained from this empirical study would likely be helpful for utility managers and policymakers to know how well they are performing, and how a better corporate strategy a particular utility can formulate to improve its operational efficiency and also its position in the marketplace.Originality/valueThis paper is amongst the first significant attempts that implement SFA approach to the panel dataset over a longer period of time – 2006 to 2013, so, as to evaluate and analyse the operational efficiency of Indian electricity distribution utilities in a single framework after the enactment of Electricity Act (2003). Unlike previous studies, this study investigates the degree to which various exogenous (or environmental) factors influence efficiency levels in these utilities.

scholarly journals TECHNICAL EFFICIENCY OF PADDY’S FARMING IN VARIOUS TYPES OF PADDY’S SEEDS IN INDONESIA

2020 ◽  
Vol 13 (3) ◽  
pp. 286
Author(s):  
Venessa Vasthi Winata ◽  
M. Rondhi ◽  
Yasuhiro Mori ◽  
Takumi Kondo
Keyword(s):  
Technical Efficiency ◽  
Formal Education ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Secondary Data ◽  
Household Survey ◽  
Rice Farming ◽  
Frontier Analysis ◽  
Rice Seeds ◽  
The Government

The increasing need for food along with increasing population is one of the problems that must be resolved by Indonesia nation. The government is trying to increase rice production and productivity by using certified seeds. Certified seeds is expected to affect technical efficiency of rice farming. The objectives of this studies are to analyze the level of technical efficiency and to identify the factors that influence the technical efficiency of rice farming in various types of main sources of rice seeds in Indonesia. The study uses secondary data that obtained from Central Bureau of Statistic (BPS) as a results from the 2014 Rice Plant Business Household Survey (SPD 2014). Data were analyzed using stochastic frontier. The results showed that the average technical efficiency level achieved by farmers in rice farming is 0,656 or less than 0,70 (<0,70) so it can be said that rice farming in Indonesia is still technically inefficient. Factors that affecting the technical efficiency of rice farming in various types of main sources of rice seeds in Indonesia were age, formal education, dummy participation of agricultural extension, and dummy certified seeds.  Keywords: certified seeds, rice farming, stochastic frontier analysis, technical efficiency, non-certified seeds

scholarly journals Eficiencia técnica de pesquerías con heterogeneidad inobservada

2019 ◽  
Vol 37 (3) ◽  
pp. 101
Author(s):  
David Castilla Espino ◽  
Juan José García del Hoyo
Keyword(s):  
Technical Efficiency ◽  
Latent Class ◽  
Stochastic Frontier Analysis ◽  
Unobserved Heterogeneity ◽  
Stochastic Frontier ◽  
Production Model ◽  
Stochastic Frontier Model ◽  
Production Frontier ◽  
Frontier Analysis ◽  
Production Activity

Fisheries production is subject to a significant variability caused no only by the stochastic nature of fisheries due to uncontrolled environmental and biological conditions, but also by factors related to production activity. It is necessary to take into consideration all these factors to avoid biases on production model estimates. This paper aims to go through this variability in Stochastic Frontier Analysis to account for observed and unobserved heterogeneity together with technical efficiency and randomness. This paper exemplifies the application of a Latent Class Stochastic Frontier model to the anchovy fishery of Southeastern Black Sea to account for production frontier heterogeneity. Results show a mean level of technical efficiency of 55%, which is higher than those produced by the standard stochastic frontier model. Moreover, results allow identifying two latent classes in the fleet. They also provide sound scientific advice for de management of the fishery.

scholarly journals Productivity and Competitiveness of Garlic Production in Pasuquin, Ilocos Norte, Philippines

2021 ◽  
Vol 18 (1) ◽  
pp. 50-63
Author(s):  
Ceptryl S. Mina ◽  
◽  
Salvador P. Catelo ◽  
Carolyn D. Jimenez ◽  
◽  
...  
Keyword(s):  
Stochastic Frontier Analysis ◽  
Group Membership ◽  
Stochastic Frontier ◽  
The Philippines ◽  
Farm Size ◽  
Cost Ratio ◽  
Frontier Analysis ◽  
Use Of Resources ◽  
The Government ◽  
Productivity And Competitiveness

A total of 124 garlic farmers were selected and interviewed to evaluate the productivity and competitiveness of garlic farming in Pasuquin, Ilocos Norte, Philippines. The Technical efficiency (TE) was estimated using a stochastic frontier analysis or SFA based on the Cobb-Douglas production functional form, while the competitiveness of local garlic production was determined based on the ratio between import parity price and domestic resource cost ratio. The mean TE was 81 percent while the estimated gamma value was 0.92. These values indicate that 92 percent of the variation in garlic output is due to inefficiency factors and that total garlic output can further be increased with efficient use of resources. The analysis further revealed that seed rate and insecticides were statistically significant production factors. The results also show that group membership, farm size, and distance to the farm-to-market road (FMR) were statistically significant. Inefficiency factors and distance to the FMR have positive relationships while group membership and farm size have negative relationships with the garlic output. Price and cost ratios show that garlic from Pasuquin, Ilocos Norte could not yet compete with imported garlic from China in 2018. However, simulations show that if the Philippines can increase its national average by at least 20 percent (4.08 mt/ ha), it can have a competitive advantage in garlic production. The results of the analyses highlight the need to revisit the output and input policies and programs of the government to increase the productivity and competitiveness of garlic farming in Ilocos Norte. These programs include investing in quality seed, joining farmers’ organizations, and providing better farming infrastructure.

scholarly journals Distinguishing Between Spatial Heterogeneity and Inefficiency: Spatial Stochastic Frontier Analysis of European Airports

2013 ◽  
Vol 14 (1) ◽  
pp. 29-38 ◽  
Author(s):  
Pavlyuk Dmitry
Keyword(s):  
Spatial Heterogeneity ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Model Specification ◽  
Frontier Analysis ◽  
Classical Models ◽  
Spatial Autoregressive ◽  
Biased Estimates ◽  
General Specification ◽  
Performance Estimates

Abstract A problem of distinguishing between frontier heterogeneity and inefficiency is widely acknowledged in benchmarking. A special type of heterogeneity, based on the spatial structure, can significantly affect performance estimates in the airport industry. In this research we presented a general specification of the spatial stochastic frontier model, which includes spatial lags, spatial autoregressive disturbances and spatial autoregressive inefficiencies. Maximum likelihood estimator has been derived for this model. Applying the suggested model specification to the European airports dataset, we discovered presence of significant spatial heterogeneity, which leads to biased estimates of efficiency, received using classical models.

scholarly journals EXAMINING EPIRA AND ITS EFFECT ON TECHNICAL AND OPERATIONAL EFFICIENCIES OF THE TOP FIVE PRIVATE DISTRIBUTION UTILITIES IN THE PHILIPPINES: SFA AND DEA APPROACHES

2020 ◽  
Vol 8 (4) ◽  
pp. 1168-1179
Author(s):  
Kathrine Joyce R. Acebedo ◽  
Nelson C. Bool ◽  
Dante R. Garcia
Keyword(s):  
Stochastic Frontier Analysis ◽  
Public Awareness ◽  
Regulatory Policy ◽  
Stochastic Frontier ◽  
The Philippines ◽  
Data Envelopment ◽  
Electric Industry ◽  
Frontier Analysis ◽  
Distribution Sector ◽  
Policy Arenas

Electric Industry. After two decades of EPIRA’s enactment, it is essential to assess where in the Distribution Sector, the reform’s trajectory has stalled. The study aimed to examine and assess the technical and operational efficiencies of the top five electric private distribution utilities (PDUs) in the Philippines under the regulatory policy. Methodology: This is a causal-comparative study using a panel data structure on technical and operational efficiencies of the top five PDUs in the Philippines from 1995 to 2014, employing quantitative measurement. This study used Data Envelopment Analysis (DEA) as the non-parametric test while Stochastic Frontier Analysis (SFA) as the parametric approach. Main Findings: Using the Stochastic Frontier Analysis (SFA) model showed that the implementation of EPIRA (post-EPIRA: 2001 to 2014) made the top five electric private distribution utilities in the Philippines more technically efficient in their operations than without the reform (pre-EPIRA: 1995 to 2000). It was also noted that PDUs with bigger franchise areas and older in existence were technically efficient in their operations than their smaller and younger PDUs counterpart, respectively. Applications: This study will enhance public awareness in the various assessment of regulatory policy arenas in PEI. Moreover, this study will also render useful insights into the management of DUs in the Philippines. Novelty/Originality of this study: An up-to-date empirical analysis of the situation to substantiate the claim of the reform’s efficiency in the Philippines is lacking in the literature. This paper is thus providing a comprehensive theoretical debate by examining some indications of EPIRA's efficiency in the Distribution Sector in the Philippines.

scholarly journals PENGARUH EFISIENSI BIAYA PERBANKAN DI KAWASAN ASEAN- 5

2018 ◽  
Vol 1 (2) ◽  
Author(s):  
Tamitha Intasar Husen
Keyword(s):  
Cost Efficiency ◽  
Commercial Banks ◽  
Stochastic Frontier Analysis ◽  
Banking Industry ◽  
Stochastic Frontier ◽  
The Philippines ◽  
Time Varying ◽  
Return On Equity ◽  
Frontier Analysis ◽  
Relationship Of

Abstract. This study examines determinants of   cost efficiency of   banking operation in ASEAN-5 region which includes Indonesia, Singapura, Malaysia, the Philippines, and Thailand. By using stochastic frontier analysis (SFA) to 23 commercial banks in the region in the period of   2005-2012, empirical results reveal certain significant relationship of   cost efficiency with individual bank characteristic (return on equity, ROE). Based on the time-varying decay method, we conclude that there is an increase in cost efficiency during the period of  study. This study also shows that in general, Indonesian banking industry was not operating efficiently. Keywords: ASEAN-5, cost efficiency, banking, SFA, time-varying decay

scholarly journals EFISIENSI BANK SYARIAH ASEAN TAHUN 2013-2013: TWO-STAGE STOCHASTIC FRONTIER ANALYSIS

2020 ◽  
Vol 7 (3) ◽  
pp. 585
Author(s):  
Ivana Rosediana Dewi ◽  
Bayu Arie Fianto
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
The Philippines ◽  
Islamic Banks ◽  
Good Efficiency ◽  
Frontier Analysis ◽  
Brunei Darussalam ◽  
Panel Data Regression ◽  
External Variables

This study aims to determine the influences of internal and external variables of Islamic banks towards technical efficiency (TE)of Islamic banks in ASEAN 2013-2018. The data represented the sample from each country. The study was analyzed using two-step processes. The first stage is looking for technical efficiency (TE) with the Stochastic Frontier Analysis (SFA) as an intermediation approach. The second stage is conducting panel data regression analysis to determine the influence of internal and external variables of Islamic banks towards TE score. The result of the study indicates that the average TE value of Islamic banks in ASEAN at the periods of the study has very good efficiency of 0.92 (92.8 percent). Respectively, Islamic banks in Indonesia have TE score higher than Malaysia. Meanwhile, Islamic banks in Brunei Darussalam have the highest TE score, followed by Islamic banks in Thailand and the Philippines. The variable of total assets (lnTA), Degree of Capitalization (EQTA), and Bank's Financing Intensity (FINTA) have a positive and significant effect on the value of TE and the variable of economic growth (GDP) and inflation rate (CPI) have no effect on TE of sharia banks.Keywords: Technical Efficiency, Islamic Bank, ASEAN, Stochastic Frontier Analysis

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