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Re: st: Stochastic Frontier


From   Federico Belotti <f.belotti@gmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: Stochastic Frontier
Date   Wed, 10 Apr 2013 15:03:25 +0200

The results of your exercise may be driven from a bunch of things.
How many banks are there in your dataset? Do their cost, output and input prices show cross-sectional variation?

Could you be more specific about your model?
Which distribution for the inefficiency term? What about heterogeneity/heteroscedasticity of the latter?

Federico

On Apr 10, 2013, at 2:17 PM, wdawd awdadw wrote:

> Hello,
> 
> I am trying to perform a stochastic frontier analysis on a cross-sectional data of sample of banks in one country to try to estimate banks' cost-efficiency using frontier stata function.
> 
> I am using a translog function of total costs as a dependent value with 2 outputs and 2 input prices as regressors.
> 
> My problem is that the results of the exercise (after I predict inefficiency estimates) are questionable with the estimates not materially differing from one another (hundreths) all of them rougly equal to 10. (10,345 10,352 10,356, etc.) which is quite strange.
> 
> Are there any suggesitons on what's the reason behind this?
> 
> Any help much appreciated.
> 
> Best regards,
> Alexander
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-- 
Federico Belotti, PhD
Research Fellow
Centre for Economics and International Studies
University of Rome Tor Vergata
tel/fax: +39 06 7259 5627
e-mail: federico.belotti@uniroma2.it
web: http://www.econometrics.it


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