Skip to main content

Research Repository

Advanced Search

Measuring productivity and efficiency: a Kalman filter approach

Duygun, Meryem; Kutlu, Levent; Sickles, Robin

Measuring productivity and efficiency: a Kalman filter approach Thumbnail


Aviva Chair in Risk and Insurance

Levent Kutlu

Robin Sickles


In the Kalman filter setting, one can model the inefficiency term of the standard stochastic frontier composed error as an unobserved state. In this study a panel data version of the local level model is used for estimating time-varying efficiencies of firms. We apply the Kalman filter to estimate average efficiencies of U.S. airlines and find that the technical efficiency of these carriers did not improve during the period 1999-2009. During this period the industry incurred substantial losses, and the efficiency gains from reorganized networks, code-sharing arrangements, and other best business practices apparently had already been realized.

Journal Article Type Article
Acceptance Date Aug 1, 2016
Online Publication Date Sep 30, 2016
Publication Date Dec 8, 2016
Deposit Date Mar 16, 2017
Publicly Available Date Mar 16, 2017
Journal Journal of Productivity Analysis
Print ISSN 0895-562X
Electronic ISSN 1573-0441
Publisher Springer Verlag
Peer Reviewed Peer Reviewed
Volume 46
Issue 2
Pages 155-167
Keywords Kalman filter, Panel data, Airline productivity
Public URL
Publisher URL
Additional Information The final publication is available at Springer via


You might also like

Downloadable Citations