Notice: On April 23, 2014, Statalist moved from an email list to a forum, based at statalist.org.
[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]
Re: st: Question regarding deterministic frontier analysis
From
Scott Merryman <[email protected]>
To
[email protected]
Subject
Re: st: Question regarding deterministic frontier analysis
Date
Thu, 29 Nov 2012 08:42:53 -0600
On Wed, Nov 28, 2012 at 1:00 PM, <[email protected]> wrote:
> Hi,
>
>
> I am new to STATA 12 and am trying to model a deterministic cost frontier using a set of panel data. However, I know that STATA's "frontier" function is for stochastic frontier. Is it possible to model with just a u (technical inefficiency) term rather than also a v (random noise) term (i.e. all of the variation is captured as technical inefficiency)?
Yes, by using the appropriate constraint to make sigma_v as small as
possible or use Corrected Ordinary Least Squares (COLS).
webuse frontier1,clear
*Can get somewhat close with the half-normal distribution
constraint define 1 [lnsig2v]_cons = -6
frontier lnout lncapital lnlabor, constraint(1)
*better with the truncated normal
constraint define 2 [lnsigma2]_cons = `=invlogit(1)'
frontier lnout lncapital lnlabor, constraint(2) d(tn)
*COLS
reg lnoutput lnlabor lncapit
predict residual, re
sum res
gen u = residual -r(max)
gen te = exp(u)
Scott
*
* For searches and help try:
* http://www.stata.com/help.cgi?search
* http://www.stata.com/support/faqs/resources/statalist-faq/
* http://www.ats.ucla.edu/stat/stata/