Sentence examples for cost frontiers from inspiring English sources

Coto-Millan et al. [10] and Barros [6] adopted the SFA for the econometric estimation of the cost frontiers of seaports.

In the DEA environment, assumptions need to be made about the functional forms for the production or cost frontiers and about the distributions of the errors (Charnes et al. 1978).

Open image in new window Fig. 3 Volatility costs as a function of the level of random and deterministic drifts Open image in new window Fig. 4 Contour plot of volatility cost frontier as a function of the two drifts.

If high cost of production on smaller farms is due to a higher cost frontier, then to make small farms competitive would require research to devise and design technology that is suitable for small farms.

In the presence of risk-free assets for both periods with interest rates of r 1,r 2, respectively, the volatility cost frontier is defined in terms of two distinguished portfolios begin{array}rcl@ xi &=&frac{Sigma^{-1}(mu -rmathbf{1})}{mathbf{1}^{prime }Sigma^{-1}(mu -rmathbf{1})} delta &=&frac{Sigma^{-1}theta}{mathbf{1}^{prime }Sigma^{-1}theta}.

Fu and Heffernan (2007, 2009) validated the results of Kumbhakar and Wang (2005) with a cost frontier model for the 1985–2002 period, finding that the X-efficiency of Chinese banks significantly declined; they concluded that the reforms had little impact on the structure of China's banking sector.

Generally, inefficiency analysis begins with estimation of a production/ cost frontier using either a deterministic or stochastic approach [ 26, 27].

While SFA is a parametric technique which uses a regression model to estimate the production or cost frontier, DEA is a non-parametric method that uses linear programming techniques to construct a piecewise frontier over the observed data.

In contrast to parametric methods such as stochastic frontier analysis (SFA), DEA has the advantage of not requiring that any assumptions be made about the functional form of the production or cost frontier.

Because deterministic models do not take into account of the effects of random factors nor the factors beyond the control of the producer, and because the database in our disposal does not capture input prices to support estimation of a cost frontier function, this paper employs a production-based stochastic frontier model [ 28- 30].

The least-cost frontier is excluding strategies G, E and H, indicating that these are less efficient than others.