[Limdep Nlogit List] Latent class Frontier Problems

[Noth, Felix]

Dear Limdep-Users,

I am trying to fit a latent class stochastic frontier production function by using model=BC and explain production regime member ship as well as TE.

FRONTIER;lhs=lnY1;rhs=one,lnk1,lnl,lnKK,lnLL,lnKL,t,tsqu,lnkt,lnlt;Eff=u;wts=y2;rob;rh2=one,a1,a2,a3,t,tsqu;pds=ni;model=BC;$
FRONTIER;lhs=lnY1;rhs=one,lnk1,lnl,lnKK,lnLL,lnKL,t,tsqu,lnkt,lnlt;Eff=u;wts=y2;rob;rh2=one,a1,a2,a3,t,tsqu;pds=ni;model=BC;
LCM=one,b1,b2,b3;Pts=3;Group=RGM;CProb=RMP;maxit=200$
create;TE=exp(-u)$
dstat;rhs=TE$

Estimates look nice but I am not able to derive serious levels of TE.

I get either almost 100% technical efficient firms like

===============================================================================
Variable     Mean       Std.Dev.     Minimum      Maximum        Cases Missing
===============================================================================
------------------------------------------------------------------------------
All observations in current sample
------------------------------------------------------------------------------
TE      |  .150860E-02  .385925E-01  .514820-130  .999841        37958       0

or no estimates of TE at all.

 ===============================================================================
Variable     Mean       Std.Dev.     Minimum      Maximum        Cases Missing
===============================================================================
------------------------------------------------------------------------------
All observations in current sample
------------------------------------------------------------------------------
TE      |   No valid information found for this variable

I think that perhaps Iteration don't get far enough for plausible starting values and therefore firms don't "leave" the top-efficiency level, but the problem does not change by using e.g. maxit=500 or higher!

Any suggestions?

Thanks.

Felix