Fitting endogenous stochastic frontier models in Stata

Mustafa Karakaplan

Stata Journal, 2017, vol. 17, issue 1, 39-55

Abstract: In this article, I introduce sfkk, a new command for fitting endogenous stochastic frontier models. sfkk provides estimators for the parameters of a linear model with a disturbance assumed to be a mixture of two components: a mea- sure of inefficiency that is strictly nonnegative and a two-sided error term from a symmetric distribution. sfkk can handle endogenous variables in the frontier or the inefficiency, and the sfkk estimates outperform the standard frontier estimates that ignore endogeneity.

Keywords: sfkk; endogeneity; endogenous stochastic frontier models; production frontier; cost frontier; endogenous inefficiency (search for similar items in EconPapers)
Date: 2017
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