Abstract
Estimation of composed error frontier models is generally conducted under certain strict assumptions. In practice however, these assumptions are not tested thoroughly. This is probably because simple workable tests are not yet available for these models. This paper develops easily computable specification tests for half-normal composed error frontier models. The tests are based on the information matrix (IM) and moment test principles. These tests are applied to the well - known Cowing (1970) steam-electric data set. Our tests reveal no serious misspecification of the cost model, while for the output model the null hypothesis of correct specification of rejected strongly.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
