Production Frontiers and Panel Data: An Application to U.S. Class 1 Railroads

In this article, the appropriateness of inefficiency measures obtained directly from the production function as in Schmidt and Sickles (1984) is examined relative to those provided by (a) the cost function aproach, (b) Klein's approach, and (c) the iterative SUR technique. Efficiency rankings yielded by different methods are also compared and tested.