Measuring profit efficiency with McFadden's gauge function

Research output: Contribution to journalArticlepeer-review

3 Scopus citations


Traditional input or output-based technical efficiency measures render composed error stochastic profit frontier estimation intractable for cross-sectional data. An alternative measure based on the gauge function simplifies estimation, permitting econometric techniques commonly used for stochastic cost frontiers.

Original languageEnglish (US)
Pages (from-to)272-277
Number of pages6
JournalEconomics Letters
Issue number2
StatePublished - Aug 2005
Externally publishedYes


  • Efficiency
  • Gauge function
  • Stochastic frontier analysis
  • Translog profit function

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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