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Re: st: Problem with sfcross - r(3200) error


From   Federico Belotti <[email protected]>
To   [email protected]
Subject   Re: st: Problem with sfcross - r(3200) error
Date   Mon, 30 Sep 2013 11:05:34 +0200

Reut Levi <[email protected]> have a starting values issue with the user-written command -sfcross-:

-sfcross- is from SSC and it is not an official Stata command. As Statalist FAQ clearly report, 
please always explain _where_ user-written programs you refer to come from.
"This helps (often crucially) in explaining your precise problem, and it alerts readers to 
commands that may be interesting or useful to them." 

> I have 10 groups of data, according to percentiles of asset size. 
> The command works for 3 out of my 10 groups.  However, for 7 of the groups, I’m getting the following error: r(3200) - “initial values not feasible”.  If there is a conformability error, why does the command work for 3 groups?


I cannot understand from what Levi wrote if his translog cost frontier is correctly specified. Nevertheless, it seems to me that the -moptimize- conformability error is a consequence of the "initial values not feasible" issue.
My suggestions to Levi are:

1) Read carefully the  "starting values" section in the -sfcross- help file. A solution to his problem might be the use of options -restart- and -rescale-, i.e.

sfcross lntc lnp1-lnloanslndd, distribution(hnormal) cost constraints (1 2 3) restart rescale

2) Try using starting values from a previous constrained regression, something like

cnsreg lntc lnp1-lnloanslndd, constraints(1 2 3)
mat b0 = e(b)
sfcross lntc lnp1-lnloanslndd, distribution(hnormal) cost constraints(1 2 3) svfrontier(b0)

Hope this helps,
Federico



On Sep 30, 2013, at 2:44 AM, Reut Levi wrote:

> Dear Statalist members,
>  
> I am using the sfcross command to estimate inefficiency levels for the U.S. banking industry. 
>  
> My syntax is: sfcross lntc lnp1-lnloanslndd, distribution(hnormal) cost constraints (1 2 3)
>  
> Where lntc is the natural log of total cost and lnp1-lnloanslndd are the natural logs for all of my input prices (3 types of input prices), outputs (2), and interaction terms.
> Also, my constraints syntax is as follows: 
>  
> constraint 1 [lnp1+lnp2+lnp3]=1
> constraint 2 [lnp1lnp1+lnp1lnp2+lnp1lnp3+lnp2lnp2+lnp2lnp3+lnp3lnp3]=0
> constraint 3 [lnp1lnloans+lnp1lndd+lnp2lnloans+lnp2lndd+lnp3lnloans+lnp3lndd]=0
>  
> Where, constraint 1 is for restricting the coefficients of input prices to 1.  Constraint 2 is for restricting the coefficients of price-price interaction terms to 0. And constraint 3 is for restricting the coefficients of price-output interaction terms to 0.
>  
> I have 10 groups of data, according to percentiles of asset size. 
> The command works for 3 out of my 10 groups.  However, for 7 of the groups, I’m getting the following error: r(3200) - “initial values not feasible”.  If there is a conformability error, why does the command work for 3 groups?
>  
> I tried a variety of things, including smaller groups, or smaller ranges for the variables; I also tried dropping all the data points for which input price or total outputs equal zero, but nothing seems to work.
>  
> Please let me know if you have any other suggestions or if you can explain the problem behind this error.
> I would be happy to provide additional information about my data or my code, if needed.
> Thank you very much for your help. Have a great week,
> Reut 
> 
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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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