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Re: st: Frontier estimation using truncated normal option


From   "Scott Merryman" <scott.merryman@gmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: Frontier estimation using truncated normal option
Date   Sun, 10 Feb 2008 17:05:49 -0600

On Feb 9, 2008 1:50 AM,  <btgilber@weber.ucsd.edu> wrote:
<snip>
> If I want to do a likelihood ratio test of
> H_o: sigma_u = 0
> With a test statistic of LR = -2*(L(H_o)-L(H_a),
> what is the appropriate value for L(H_o)?
>
> Is it the e(ll_c) value saved in the frontier results
> (in which case e(chi2_c) is my test statistic)

Yes, it is the log likelihood for H_o: sigma_u = 0

> I thought they would be numerically equivalent (if
> sigma_u = 0, the frontier collapses to a simple
> linear regression - and the likelihoods for normal
> errors should be the same).

When simga_u = 0 and mu = 0 then the truncated normal model reduces to OLS.

Scott
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