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Re: st: Stochastic Frontier


From   Alexander <[email protected]>
To   "[email protected]" <[email protected]>
Subject   Re: st: Stochastic Frontier
Date   Thu, 11 Apr 2013 23:34:41 +0400

Thank you very much for your response.

There are about 600 banks in the dataset. There is a size-related variation between the observations as some of the banks are much larger then all others.

I assume truncated normal distribution, however I am at loss regarding how to test for the heterogeneity/heteroscedasticity of the inefficiency term?


Alexander


10.04.2013, 17:05, "Federico Belotti" <[email protected]>:
> The results of your exercise may be driven from a bunch of things.
> How many banks are there in your dataset? Do their cost, output and input prices show cross-sectional variation?
>
> Could you be more specific about your model?
> Which distribution for the inefficiency term? What about heterogeneity/heteroscedasticity of the latter?
>
> Federico
>
> On Apr 10, 2013, at 2:17 PM, wdawd awdadw wrote:
>
>>  Hello,
>>
>>  I am trying to perform a stochastic frontier analysis on a cross-sectional data of sample of banks in one country to try to estimate banks' cost-efficiency using frontier stata function.
>>
>>  I am using a translog function of total costs as a dependent value with 2 outputs and 2 input prices as regressors.
>>
>>  My problem is that the results of the exercise (after I predict inefficiency estimates) are questionable with the estimates not materially differing from one another (hundreths) all of them rougly equal to 10. (10,345 10,352 10,356, etc.) which is quite strange.
>>
>>  Are there any suggesitons on what's the reason behind this?
>>
>>  Any help much appreciated.
>>
>>  Best regards,
>>  Alexander
>>  *
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> --
> Federico Belotti, PhD
> Research Fellow
> Centre for Economics and International Studies
> University of Rome Tor Vergata
> tel/fax: +39 06 7259 5627
> e-mail: [email protected]
> web: http://www.econometrics.it
>
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