Hi,
I am trying to find out the scale efficiency and optimal scale of banks
by stochastic frontier analysis given the panel data of bank. I am free to
choose any model of stochastic frontier analysis.
The only approach I know to work with R is to estimate a translog
production function by sfa or other related function in frontier package,
and then use the Ray 1998 formula to find the scale efficiency. However, as
the textbook Coelli et al 2005 point out that the concavity may not be
satisfied, one needs to impose the nonpositive definiteness condition so
that the scale efficiency <1. How can I do it with frontier package?
Is there any other SFA model/function in R recommended to find out the
scale efficiency and optimal scale?
Thanks,
Miao
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