This paper makes two important contributions to the literature on prediction intervals for firm specific inefficiency estimates in cross sectional SFA models. Firstly, the existing intervals in the literature do not correspond to the minimum width intervals and in this paper we discuss how to...

This study explores the relationship between cost inefficiency and profitability in the U.S. life insurance industry. Earnings have particular importance to life insurance companies because earnings and capital determine the viability of the insurer. Since the life insurance industry is mature...

This paper examines the impact of an endogenous cost function variable on the inefficiency estimates generated by stochastic frontier analysis (SFA). The specific variable of interest in this application is endogenous quality in nursing homes. We simulate a dataset based on the characteristics...

The normal-gamma stochastic frontier model was proposed in Greene (1990) and Beckers and Hammond (1987) as an extension of the normal-exponential proposed in the original derivations of the stochastic frontier by Aigner, Lovell and Schmidt (1977). The normal-gamma model has the virtue of...