[Limdep Nlogit List] FRONTIER command : Battese & Coelli 95 model

Barry Quinn b.quinn at qub.ac.uk
Fri Oct 2 21:24:03 EST 2009


Hi 

I am attempting to recreate the Battesse & Coelli 1995 model in which they model the Technical inefficiency using firm specific factors in a panel data setting.
To date i have only been using the Ceolli DOS program in which i have been including a time trend variable in the Technical inefficiency model to control for temporal effects.
In Limdep  i use the options 
pds=_groupsize ;model=bc ; Rh2= one, time trend ,......and other firm specific factors

But my concern is that in the manual the BC model seems to be the 1988 model specification which specifically accounts for time variation using the eta term 
Also the manual notes that " Battesse and Coelli (1995) ..not withstanding the assertion in the paper, the latter is not a panel data treatment as observations are still assumed to be independent".

Would this mean that i should not use the Model=BC option at all, but instead use model=T and Rh2= one, time trend, ......other firm specific factors, and control for the panel using firm dummies ?

My panel is has a large number of firms(480) over a short time period(6yrs) so i am concern this amount of dummies my cause estimation issues

any advice would be much appreciated

many thanks 

Barry Quinn

Queens University Belfast


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