Technical Efficiency Estimation at Public and Private Sector Industries at Iran by Using stochastic Frontier Analysis Method

Coordination, cooperation and task allocation, based on the efficiency index between market mechanism and government is a general and long run rule that each society considerers it regarding their social, political and cultural values for achieving the optimal ratio between the state and market combination. Regarding crucial role of private sector in efficient and compatible product and also with respect to importance of private sector development, in this study after investigating public performance and privatization trend using SFA, we estimate and compare technical efficiency in private and public subsector. Model's parameters are estimated by MLE within 1373-1384. Results show that technical efficiency estimation of all 6 private industry sectors trend is smooth but this trend has tangible decrease in public sector. Public efficiency average was lower than the same private subsector over period of our study except for first 3 years.