Re: st: RE: Frontier code- r(1400) error

[e156746@metu.edu.tr]

Dear Nick and Gordon

Thank you for your advices. But Gordon says that "you have only 29
observations". I might have expressed myself in an incorrect way. I have 4
output variables, 3 input price variables for the 29 firms. Actually I
have 208 observations. It seems enough to estimate the frontier, isn't it
?

Thank you
Hande

> Nick's answer is correct.  You have 27 parameters plus the additional
> parameters for the efficiency error distribution and only 29
> observations.  This will never produce a satisfactory result.
>
> Translog frontier models can be difficult to estimate under the best
> of circumstances without trying to over-determine the frontier.  You
> should start by estimating the basic log-linear Cobb-Douglas form
> (dropping all of the interaction terms) and then introduce
> interactions individually and very carefully.  Even then it is
> unlikely that you will get any convincing results with such a small
> sample.
>
> Gordon Hughes
> g.a.hughes@ed.ac.uk
>
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