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.

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

Part I General Information 1. Introduction 2. Production, distance, cost, and profit functions Part II Single Equation Approach: Production, Cost, and Profit 3. Estimation of technical efficiency in Production frontier models using cross-sectional data 4. Estimation of technical efficiency in Cost frontier models using cross-sectional data 5. Estimation of technical efficiency in Profit frontier models using cross-sectional data Part III System Models with Cross-Sectional Data 6. Estimation of technical efficiency in Cost frontier models using system models with cross-sectional data 7. Estimation of technical efficiency in Profit frontier models using system models with cross-sectional data Part IV The Primal Approach 8.Estimation of technical and allocative efficiency in cost frontier models using system models with cross-sectional data : a primal system approach 9. Estimation of technical and allocative efficiency in profit frontier models using system models with cross-sectional data : a primal system approach Part V Single Equation Approach with Panel Data 10. Estimation of technical efficiency in single equation Panel models 11. Productivity and profitability decomposition Part VI Looking Ahead 12. Looking ahead