ABSTRACT
Sochastic frontier model is widely used, while the decomposing of the error term and the estimate of the parameters of stochastic frontier model is a difficult point, error term disposing of stochastic frontier model by Aigner-chu model was put forward in this paper, an example of electric power industry showed that the method draw the advantages of Aigner-Chu model and stochastic frontier analysis, while the resolving of the model is easier than stochastic frontier analysis, furthermore, the value of technical efficiency was not affected by the measurement error.
