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RE: st: frontier


From   Khurshid Djalilov <kdjalilov@bournemouth.ac.uk>
To   "statalist@hsphsun2.harvard.edu" <statalist@hsphsun2.harvard.edu>
Subject   RE: st: frontier
Date   Mon, 17 Dec 2012 20:27:52 +0000

Yuval, please read the studies by Hasan and Marton (2003) and Fang, Hasan, Marton (2011) and the answers to your questions are there.



-----Original Message-----
From: owner-statalist@hsphsun2.harvard.edu [mailto:owner-statalist@hsphsun2.harvard.edu] On Behalf Of Yuval Arbel
Sent: 17 December 2012 20:20
To: statalist@hsphsun2.harvard.edu
Subject: Re: st: frontier

Nick, my intention is far more than simply defining what efficiency is. Even If we are dealing with Economic theory regarding producer who is a profit maximizer (under a competitive market framework), there are certain rules to the game: you cannot simply estimate TC as a function of the output, because both variables are endogenous. To make it even more complex, note that financial markets are highly noncompetitive, and suffer from other problems, such as information problems, moral hazard, adverse selection etc. This is a whole separate world, and if you would like to make a serious research work, which merit some value, the first stage is to study the subject

On Mon, Dec 17, 2012 at 8:53 PM, Nick Cox <njcoxstata@gmail.com> wrote:
> The disjunction here does not appeal to me (either you are doing
> academic research in economics or my advice is fine!).
>
> I imagine that Yuval's underlying point is that work on inefficiency
> cannot be taken seriously if no there is no definition of inefficiency
> to be discussed. Normally I would align myself with this kind of
> comment, but my point was, and remains, that given an interest in
> applying the -frontier- command, "inefficiency" is as defined by that
> kind of model and so the lack of a definition seems unsurprising.
>
> Nick
>
> On Mon, Dec 17, 2012 at 4:57 PM, Yuval Arbel <yuval.arbel@gmail.com> wrote:
>
>> An important question is what is the objective of the regression
>> analysis. My implicit assumption (which might be incorrect) was that
>> it was intended for academic research in Economics. If it is not,
>> then Nick's advice is fine
>
> On Mon, Dec 17, 2012 at 6:39 PM, Khurshid Djalilov
> <kdjalilov@bournemouth.ac.uk> wrote:
>
> Thanks very much for your comment, I did not mention this in the post.
> By 'bank efficiency' I mean how efficiently banks are using their
> resources to maximise (minimise) their profits (costs).  Following
> 'intermediation' approach, I selected bank input and output variables.
>
> Nick Cox
>
> In this case, "inefficiency" is defined by the context of the
> -frontier- command mentioned.
>
> My advice is to read the help file first and then the manual entry.
>
> Being a new user does not oblige anyone to fill in for those basics
>
> Yuval Arbel
>
> Unfortunately, your question is not very well defined. The term
> "Inefficiency" in Economics have many interpretations. It could be
> inefficiency to society, in which case Banks are highly inefficient,
> because they are discriminating Monopolies, it could be inefficiency
> of the Bank, namely the Bank does not maximizes profit, and it could
> be inefficiency in terms of rational expectation theory, namely price
> movements in the market are not random.
>
> Before you go on, my suggestion to you is to make some search of the
> academic literature either in google scholar or econlit.
>
>
> On Mon, Dec 17, 2012 at 4:52 PM, Khurshid Djalilov
> <kdjalilov@bournemouth.ac.uk> wrote:
>
>>>> I am trying to investigate Cost (Profit) inefficiencies for 86 banks representing two different regions (panel data).
>>>> In addition to input-output variables I have dummy as well as economic development variables. I was wondering how I can generate cost and profit efficiencies as I am a new user and am having problems with this.
>>>>
>>>> The variable I have as following:
>>>>
>>>> TC - dependent variable, PBF - (input, independent variable), OV -
>>>> (input, independent variable), TL - (output, independent variable), OEA - (output, independent variable), NFC - (output, independent variable), N1 - (netput, independent variable), N2 - (netput, independent variable), Y - (time, independent), r - regional dummy (independent), g - growth (independent), inf - inflation (independent).
>>>>
>>>> I would appreciate if anyone could write commands using these variables, please.
>
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--
Dr. Yuval Arbel
School of Business
Carmel Academic Center
4 Shaar Palmer Street,
Haifa 33031, Israel
e-mail1: yuval.arbel@carmel.ac.il
e-mail2: yuval.arbel@gmail.com

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