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

From   Nick Cox <>
Subject   Re: st: RE: Frontier code- r(1400) error
Date   Sun, 3 Apr 2011 00:19:42 +0100

Your original posting was

Evidently, that guess of 29 observations was wrong. You are still left
with the suggestion that your model appears too complicated and that
one strategy is to simplify it radically. When you get a model that
does not produce estimates, you can complicate it step by step to see
where the problem lies.


2011/4/2  <>:
> 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.

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