This research builds on Nonparametric Multi-variate Bayesian Convex Regression to develop a method to estimate shape constrained production frontiers with heteroskedastic inefficiency distributions that scales up to thousands of observations.
We propose a Bayesian method which allows the estimation of a semiparametric production frontiers with a flexible inefficiency distribution, to use panel data and to measure the impact of environmental variables. A Metropolis-Hastings framework is considered to compute smoothed and non-smooth estimates of the production frontier.
Working Paper available at Arxiv.