Fitting Endogenous Stochastic Frontier Models in Stata. (March 2017)

• Record Type: Journal Article
• Authors: Karakaplan, Mustafa U.
• Is Part Of: Stata journal. Volume 17:Number 1(2017)
• Page Start: 39
• Page End: 55
• Publication Date: 2017-03
• Subjects: st0466 -- sfkk -- endogeneity -- endogenous stochastic frontier models -- production frontier -- cost frontier -- endogenous inefficiency; Statistics -- Periodicals; Statistics -- Computer programs -- Periodicals; 001.422
• DOI: 10.1177/1536867X1701700103
• Languages: English
• ISSNs: 1536-867X

Abstract

In this article, I introducesfkk, 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 measure 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 thesfkk estimates outperform the standard frontier estimates that ignore endogeneity.