Dear all,
I was wondering if anyone could help with a few queries relating to stochastic frontier estimation in stata (the "xtfrontier" command).
(1) The time-varying method of Battese and Coelli (1992) is included as an option in the Stata package. However, this method assumes that the technical inefficiency terms are independently and identically distributed (iid). If these terms are indeed identically distributed, Coelli, Rao and Battese (1998) argue that the technical efficiency values cannot be used in a second stage regression to analyze determinants of these technical inefficiency terms. Battese and Coelli (1995) proposed an adjustment to allow this second-stage testing - do you know if the xtfrontier includes this adjustment?
(2) Is there anyway to combine xtabond2 (or other instrumenting methods) with xtfrontier?
Regards,
Fraser
--
Fraser Thompson
Department of Economics
Junior Dean
Pembroke College, Pembroke Square, Oxford, Oxfordshire, UK OX1 1DW
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