  The stochastic frontier model with heterogeneous technical efficiency
explained by exoge-nous variables is augmented with a spatial-temporal
component, a generalization relaxing the panel independence assumption in a
panel data. The estimation procedure takes advantage of additivity in the
model, computational advantages over maximum likelihood estimation of
parameters is exhibited. The spatial-temporal component can improve estimates
of technical efficiency in a production frontier that is usually biased
downwards. We present a test to veri-fy model assumptions that facilitates
estimation of parameters.
