The Analysis of Generalized SFA

Min Wang

School of Management, University of Science and Technology, Hefei, 230026, China

Abstract: In the standard stochastic frontier model,the residual term that   is composed by two in-dependent random variables   and  . In this paper, utilizing copulas, we say that they are dependent be-tween   and  .Whence, we obtain a new method, which calculate the technical efficiency. We apply the method to estimating the technical efficient score of six provinces and one municipality of china.

Keywords: Stochastic  Frontier; Dependent  Random Variables; Copula Functions