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Abstract
Using data from the Mid-Atlantic surfclam fishery, this study examines the effect of measurement
error on the analysis of technical efficiency. After specifying a stochastic frontier
model and estimating it under naive analysis, a measurement error correction technique known
as Simulation Extrapolation (SIMEX) is used to obtain less biased estimates of technical efficiency
and production parameters. The SIMEX estimates of the stochastic frontier model agree
with economic theory and show that important relationships between technical efficiency and
vessel characteristics are present, something the naive estimates do not. Both sets of estimates
show regional variation in technical efficiency, possibly due to declining landings per-uniteffort,
suggesting future fishery management should take this into account.