Inefficiency predictions revolutionized with new GARCH models for economic measures.
The article introduces new models for analyzing inefficiency in industries, using a statistical method called GARCH. By applying these models to real data on electricity distribution, the researchers found that ignoring the GARCH process leads to inaccurate predictions of inefficiency. They also discovered that not considering GARCH can affect economic measures like input elasticities and returns to scale. Additionally, they compared different GARCH models to see which one works best.