A Practitioner's Guide to Stochastic Frontier Analysis Using Stata

This book provides practitioners with a step-by-step guide on how to conduct efficiency analysis using the stochastic frontier approach.

Subal C. Kumbhakar (Author), Hung-Jen Wang (Author), Alan P. Horncastle (Author)

9781107029514, Cambridge University Press

Hardback, published 2 February 2015

374 pages, 56 b/w illus.
25.4 x 17.8 x 2.2 cm, 0.87 kg

'This book is a significant contribution to an applied introduction to stochastic frontier analysis. The authors explain clearly many of the models used in efficiency estimation, which has become a standard tool in the arsenal of applied economics. They explain clearly the models and the assumptions and provide a thorough introduction to estimating performance and efficiency for the practitioner. The many scientific fields in which efficiency and performance measurement are important will benefit immensely from the book not only because of its clarity and concreteness but also because the models are taken directly to practice using Stata, standard software used by many researchers. The combination of theory and practical application is masterfully done in this book, and practitioners in a vast number of fields will find it indispensable for their research.' Mike G. Tsionas, Athens University of Economics and Business

A Practitioner's Guide to Stochastic Frontier Analysis Using Stata provides practitioners in academia and industry with a step-by-step guide on how to conduct efficiency analysis using the stochastic frontier approach. The authors explain in detail how to estimate production, cost, and profit efficiency and introduce the basic theory of each model in an accessible way, using empirical examples that demonstrate the interpretation and application of models. This book also provides computer code, allowing users to apply the models in their own work, and incorporates the most recent stochastic frontier models developed in academic literature. Such recent developments include models of heteroscedasticity and exogenous determinants of inefficiency, scaling models, panel models with time-varying inefficiency, growth models, and panel models that separate firm effects and persistent and transient inefficiency. Immensely helpful to applied researchers, this book bridges the chasm between theory and practice, expanding the range of applications in which production frontier analysis may be implemented.

1. Introduction
2. Production, distance, cost, and profit functions
3. Production frontier models
4. Cost frontier models
5. Profit frontier models
6. Cost system models
7. Profit system models
8. Primal cost models
9. Profit primal models
10. Panel models
11. Productivity and profitability
12. Looking ahead.

Subject Areas: Applied mathematics [PBW], Economic statistics [KCHS], Econometrics [KCH]