Eddy,
Thanks for the additional insight and the tip about Hung-Jen Wang's web site.
His programs are available at:
http://www.sinica.edu.tw/~wanghj/
Scott
----- Original Message -----
From: "Eddy" <[email protected]>
To: <[email protected]>
Sent: Monday, December 22, 2003 11:59 PM
Subject: Re: st: Re: Xtfrontier
> I want to add my two cents to Scott's advice pertaining to
> "environmental factors" in the inefficiency equation. Consider a
> flexible/general specification of the inefficiency distribution
> u~|N(mu, sigma2)|. If environmental factors are desired, one "should"
> be able to add those variables through either mu, sigma2, or both.
> However, Stata's current -frontier- model only allows for the
> following configurations.
>
> (1) mu=0, and sigma2=varlist;
> (2) mu=varlist, and sigma2=constant.
>
> It does not support at least the following configurations:
>
> (3) mu=constant, and sigma2=varlist;
> (4) mu=varlist, and sigma2=varlist.
>
> Hung-Jen Wang (2002 Journal of Productivity Analysis, p.241-53) shows
> why model (4) is particularly desirable. I think he provides his
> Stata program, which should estimate all the models above, on his web
> site (try search his name on google).
>
> -- Eddy
>
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