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Horrace paper on ranking & selection from independent truncated normal distributions published in JE

May 31, 2005

On Ranking and Selection from Independent Truncated Normal Distributions

William C. Horrace

Journal of Econometrics, May 2005

William C. Horrace

William C. Horrace


This paper develops probability statements and ranking and selection rules for independent truncated normal populations. An application to a broad class of parametric stochastic frontier models is considered, where interest centers on making probability statements concerning unobserved firm-level technical inefficiency. In particular, probabilistic decision rules allow subsets of firms to be deemed relatively efficient or inefficient at prespecified probabilities. An empirical example is provided.