Estimation of the Economic Efficiency of a Shift to the Achievable Production Potential

Abstract

Developing a concept of stochastic frontier we estimate the expected increase in the production volume achieved as a result of a shift to the achievable production potential. The expected economic effect of an activity of raising production efficiency is forecast. The distribution of the economic effect allowing analyzing risks related to an activity realization is givenProduction potential; stochastic frontier; production function; technical efficiency; achievable production potential