%0 Journal Article
%T A comparison of parametric and nonparametric estimation methods for cost frontiers and economic measures
%A Allen M. Featherstone
%A Bryon J. Parman
%J Journal of Applied Economics
%D 2019
%R https://doi.org/10.1080/15140326.2018.1526868
%X ABSTRACT This article examines the empirical performance of alternative frontier estimators¡¯ ability to replicate a known underlying technology and economic measures such as multi-product and product-specific economies of scale, and economies of scope. A cross sectional Monte Carlo procedure to simulate data is used to evaluate a two-sided error system, an OLS system restricting errors to be above the cost frontier, the stochastic frontier method, and data envelopment analysis (DEA). The data are generated assuming a half-normal distribution, and a uniform distribution. Data were also simulated with single and two output firms. The DEA estimator was most robust in estimating the ¡°true¡± cost frontier and associated economic measures including data sets without single output firms and less effected by distributional assumptions
%U https://www.tandfonline.com/doi/full/10.1080/15140326.2018.1526868