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Re: st: Re: Finding initial feasible values for xtfrontier, ti cost version, please help!


From   Scott Merryman <scott.merryman@gmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: Re: Finding initial feasible values for xtfrontier, ti cost version, please help!
Date   Fri, 26 Mar 2010 06:28:10 -0500

On Thu, Mar 25, 2010 at 4:27 PM, Chong, Qi Lin Andrew
<qchong@middlebury.edu> wrote:
> Hello all,
>
> I am running an xtfrontier on commercil banks, with the cost specification on stata. I have found David Drukker's guide to finding the initial value for a frontier eqn v. helpful, but he uses the normal specification (production and not cost) and also the example is not in panel form.
>
> http://www.stata.com/statalist/archive/2003-05/msg00650.html
>
> QUERY1) My question is how to replicate the above steps and find the appropriate inital values for xtfrontier, ti cost. I'm not sure how it changes the format above, in terms of running a straightforward regression, but using
>
> regress logexpense logsum logpdep logpop logdeppop logsumdep logsumpop,
> matrix b0 = e(b), ln(e(rmse)^2) , .1
>
> I am left with one missing variable and get the error message
>
> initial vector: matrix must be dimension 10
>
<snip>

With -xtfrontier , ti- there are 3 additional parameters: -mu-,
-lnsigma2-, and -ilgtgamma- and value must be given for each of them.

For example:


. webuse xtfrontier1

. qui reg lnwidgets lnmachines lnworkers

. matrix b0 = e(b), 1, ln(e(rmse)^2) , .1

. xtfrontier lnwidgets lnmachines lnworkers, ti  from(b0, copy) nolog

Time-invariant inefficiency model               Number of obs      =       948
Group variable: id                              Number of groups   =        91

                                                Obs per group: min =         6
                                                               avg =      10.4
                                                               max =        14

                                                Wald chi2(2)       =    661.76
Log likelihood  = -1472.6069                    Prob > chi2        =    0.0000

------------------------------------------------------------------------------
   lnwidgets |      Coef.   Std. Err.      z    P>|z|     [95% Conf. Interval]
-------------+----------------------------------------------------------------
  lnmachines |   .2904551   .0164219    17.69   0.000     .2582688    .3226415
   lnworkers |   .2943332   .0154352    19.07   0.000     .2640807    .3245857
       _cons |   3.030971    .144102    21.03   0.000     2.748536    3.313406
-------------+----------------------------------------------------------------
         /mu |   1.125531    .648041     1.74   0.082    -.1446056    2.395668
   /lnsigma2 |    1.42203   .2673122     5.32   0.000     .8981073    1.945952
  /ilgtgamma |    1.13875   .3563081     3.20   0.001      .440399    1.837101
-------------+----------------------------------------------------------------
      sigma2 |   4.145526    1.10815                      2.454952    7.000293
       gamma |   .7574501   .0654607                      .6083541    .8626055
    sigma_u2 |   3.140029   1.107447                       .969473    5.310585
    sigma_v2 |   1.005497   .0484144                      .9106065    1.100387
------------------------------------------------------------------------------

Scott

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