technical.efficiency.change: Technical and efficiency change estimation

In snfa: Smooth Non-Parametric Frontier Analysis

Description

Estimates technical and efficiency change using SNFA

Usage

technical.efficiency.change(df, input.var.names, output.var.name,
  firm.var.name, time.var.name, method = "u")

Arguments

df	Data frame with variables used in estimation
input.var.names	Names of input variables; must appear in df
output.var.name	Name of output variable; must appear in df
firm.var.name	Name of firm variable; must appear in df
time.var.name	Name of time variable; must appear in df
method	Constraints to apply; "u" for unconstrained, "m" for monotonically increasing, and "mc" for monotonically increasing and concave

Details

This function decomposes change in productivity into efficiency and technical change, as in Fare et al. (1994), using smooth non-parametric frontier analysis. Denoting D_s(x_t, y_t) as the efficiency of the production plan in year t relative to the production frontier in year s, efficiency change for a given firm in year t is calculated as

\frac{D_{t+1}(x_{t+1}, y_{t+1})}{D_t(x_t, y_t)},

and technical change is given by

≤ft( \frac{D_t(x_{t+1}, y_{t+1})}{D_{t+1}(x_{t+1}, y_{t+1})}\times \frac{D_t(x_t, y_t)}{D_{t+1}(x_t, y_t)} \right)^{1/2}.

Value

Returns a data.frame with the following columns

firm.var.name	Column of firm name data
time.var.name	Column of time period data
efficiency.change	Average annual efficiency change since the previous period in data
technical.change	Average annual technical change since the previous period in data
productivity.change	Average annual productivity change since the previous period in data

References

\insertRef

Faresnfa

Examples

data(panel.production)

results.df <- technical.efficiency.change(df = panel.production,
                                          input.var.names = c("X.1", "X.2", "X.3"),
                                          output.var.name = "y",
                                          firm.var.name = "Firm",
                                          time.var.name = "Year")

#Plot changes over time by firm
library(ggplot2)

ggplot(results.df, aes(Year, technical.change)) +
  geom_line(aes(color = Firm))
ggplot(results.df, aes(Year, efficiency.change)) +
  geom_line(aes(color = Firm))
ggplot(results.df, aes(Year, productivity.change)) +
  geom_line(aes(color = Firm))
  

snfa documentation built on May 1, 2019, 9:16 p.m.