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Article

Specification scheme of the stochastic production function for assessment of technical efficiency of the regions in the Russian Federation

Russian Journal of Mathematical Research. Series A. 2018. Т. 4. № 1. С. 38-47.

We propose a method of specification of stochastic production function models for solving problems related to the ranking of objects by the level of technical efficiency at production-regional level. The described method takes into account potential dependence between the random components of the error.
Based on actual data on 80 sub-federal units of the Russian Federation grouped according to the basic characteristics of the GRP structure, an empirical analysis of the influence of possible dependence of the error components on the values of regions’ technical efficiency was carried out in accordance with the developed specification scheme. The main types of problems where it is possible to use the premise of the independence of the random error components were described.