CONFIDENCE-STATEMENTS FOR EFFICIENCY ESTIMATES FROM STOCHASTIC FRONTIER MODELS

This paper is an empirical study of the uncertainty associated with te chnical efficiency estimates from stochastic frontier models. We show how to construct confidence intervals for estimates of technical effic iency levels under different sets of assumptions ranging from the very strong to the relatively weak. We demonstrate empirically how the deg ree of uncertainty associated with these estimates relates to the stre ngth of the assumptions made and to various features of the data.