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Re: st: option predict te for cost frontier in stata 8.2


From   "Dev Vencappa" <lexdvv@nottingham.ac.uk>
To   <statalist@hsphsun2.harvard.edu>
Subject   Re: st: option predict te for cost frontier in stata 8.2
Date   Mon, 20 Jun 2005 01:57:53 +0100

>
>
Stata users,
 I made a typo in the previous email which may have confused some users, so I'm posting it again. 
  I was running the frontier command for both a production and a cost function. While I understand that the option predict te retrieves the efficiency scores ranging between 0 and 1, when I was running the cost function I was a bit confused with the scores retrieved from the cost frontier. I got values ranging from close to 1 onwards, and I understand these need to be bound between 0 and 1. Am I right in assuming that the correct cost efficiency scores are just the inverse of the predicted efficiency scores from the predict te option? I suppose Stata is simply computing these scores in a similar way as for the production frontier, i.e. actual output/maximum output, so actual cost/minimum cost instead of minimum cost/actual cost?

Thanks in advance for any guidance on this. 

Dev


Dev Vencappa
School of Economics
University of Nottingham
University Park
Nottingham
NG7 2RD
U.K.
Tel : +44 (0)115 951 5608
Fax: +44 (0) 115 951 4159

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Dev Vencappa
School of Economics
University of Nottingham
University Park
Nottingham
NG7 2RD
U.K.
Tel : +44 (0)115 951 5608
Fax: +44 (0) 115 951 4159

This message has been checked for viruses but the contents of an attachment
may still contain software viruses, which could damage your computer system:
you are advised to perform your own checks. Email communications with the
University of Nottingham may be monitored as permitted by UK legislation.


*
*   For searches and help try:
*   http://www.stata.com/support/faqs/res/findit.html
*   http://www.stata.com/support/statalist/faq
*   http://www.ats.ucla.edu/stat/stata/



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