Dear Stata users,
I am using Stata 15 and I am quite new in using this software. I am working on a profit and cost efficiency analyses of 309 tourists firms for period 2008-2017. I have chosen to apply the Battese & Coelli(1995) model (Translog function). I have gone through the Stata journal by Belotti et al. (2013) as well. I took the ln of some of the inputs and outputs. The variables that I have chosen are: lnTotal Costs and EBIT as dependent variables, respectively for cost and profit efficiency function; independent output variable: LnSales Revenue; independent input variables: lnLabour costs, LnMaterial costs, LnPhysical Capital costs; explanatory variables of inefficiencies: 3*category, 4*category, 5*category and Tourism Specialization. Every time I try and run the model of Cost efficiency I receive these results:
These are some results.
Can you explain to me what this message 'BFGS stepping has contracted, resetting BFGS Hessian' means?
Should I do some extra actions with my data or I am using wrong syntax?
When I have trying to run the Profit Efficiency function I received this error message:
The results are:
I can not understand what this message 'could not calculate numerical derivatives -- flat or discontinuous region encountered' means.
The dependent variables is EBIT and it can take negative value that is why I do not generate it into ln forms. Do you think that the problem is the negative values of some units or something else?
I will be so grateful if anyone can help me.
Thank you in advance.
I am using Stata 15 and I am quite new in using this software. I am working on a profit and cost efficiency analyses of 309 tourists firms for period 2008-2017. I have chosen to apply the Battese & Coelli(1995) model (Translog function). I have gone through the Stata journal by Belotti et al. (2013) as well. I took the ln of some of the inputs and outputs. The variables that I have chosen are: lnTotal Costs and EBIT as dependent variables, respectively for cost and profit efficiency function; independent output variable: LnSales Revenue; independent input variables: lnLabour costs, LnMaterial costs, LnPhysical Capital costs; explanatory variables of inefficiencies: 3*category, 4*category, 5*category and Tourism Specialization. Every time I try and run the model of Cost efficiency I receive these results:
Code:
sfpanel lTC lSR lpL lpM lpPhC Year, model(bc95) dist(tn) emean(category3 category4 category5 Tourismspecialization ) ort(o)
Code:
initial: Log likelihood = -7224.8875 Iteration 0: Log likelihood = -7224.8875 Iteration 1: Log likelihood = -6065.1666 (backed up) Iteration 2: Log likelihood = -5868.4579 (backed up) Iteration 3: Log likelihood = -5714.9868 (backed up) Iteration 4: Log likelihood = -5693.4116 (backed up) Iteration 5: Log likelihood = -5635.5574 (backed up) Iteration 6: Log likelihood = -5627.7123 (backed up) Iteration 7: Log likelihood = -5576.0618 (backed up) Iteration 8: Log likelihood = -5492.4664 (backed up) Iteration 9: Log likelihood = -5170.6388 (backed up) Iteration 10: Log likelihood = -4820.927 (backed up) Iteration 11: Log likelihood = -4654.692 (backed up) Iteration 12: Log likelihood = -4582.0477 Iteration 13: Log likelihood = -3682.9697 Iteration 14: Log likelihood = -2918.4183 Iteration 15: Log likelihood = -1668.3032 Iteration 16: Log likelihood = -1573.0303 Iteration 17: Log likelihood = -1407.2167 Iteration 18: Log likelihood = -1199.2455 Iteration 19: Log likelihood = -1111.6501 Iteration 20: Log likelihood = -1036.1432 Iteration 21: Log likelihood = -994.09753 Iteration 22: Log likelihood = -961.96257 Iteration 23: Log likelihood = -914.4405 BFGS stepping has contracted, resetting BFGS Hessian Iteration 24: Log likelihood = -890.15886 Iteration 25: Log likelihood = -890.15698 (backed up) Iteration 26: Log likelihood = -887.35603 (backed up) .................................................. .................................. Iteration 98: Log likelihood = -845.8587 Iteration 99: Log likelihood = -841.51001 Iteration 100: Log likelihood = -841.36681 Inefficiency effects model (truncated-normal) Number of obs = 3370 Group variable: UIC Number of groups = 348 Time variable: Year Obs per group: min = 1 avg = 9.7 max = 10 Prob > chi2 = 0.0000 Log likelihood = -841.3668 Wald chi2(5) = 29977.96 --------------------------------------------------------------------------------------- lTC | Coef. Std. Err. z P>|z| [95% Conf. Interval] ----------------------+---------------------------------------------------------------- Frontier | lSR | .8265737 .0056998 145.02 0.000 .8154022 .8377451 lpL | .3862649 .0144812 26.67 0.000 .3578823 .4146475 lpM | .3463463 .0080424 43.07 0.000 .3305836 .3621091 lpPhC | .0036081 .0061366 0.59 0.557 -.0084194 .0156357 Year | -.0242052 .0021223 -11.41 0.000 -.0283649 -.0200455 _cons | 49.74526 4.263296 11.67 0.000 41.38935 58.10117 ----------------------+---------------------------------------------------------------- Mu | category3 | -.0477896 .0180303 -2.65 0.008 -.0831284 -.0124509 category4 | -.0969461 .0202058 -4.80 0.000 -.1365486 -.0573435 category5 | -6.000944 .4847824 -12.38 0.000 -6.9511 -5.050788 Tourismspecialization | -.1345739 .2149034 -0.63 0.531 -.5557769 .2866291 _cons | .2507753 .0318595 7.87 0.000 .1883317 .3132188 ----------------------+---------------------------------------------------------------- Usigma | _cons | -5.155248 .2810498 -18.34 0.000 -5.706096 -4.604401 ----------------------+---------------------------------------------------------------- Vsigma | _cons | -2.400803 .0278476 -86.21 0.000 -2.455383 -2.346223 ----------------------+---------------------------------------------------------------- sigma_u | .0759542 .0106735 7.12 0.000 .0576683 .1000385 sigma_v | .3010733 .0041921 71.82 0.000 .2929681 .3094028 lambda | .2522782 .0128424 19.64 0.000 .2271076 .2774489 ------------------------------------------------------------------------------
Should I do some extra actions with my data or I am using wrong syntax?
When I have trying to run the Profit Efficiency function I received this error message:
Code:
sfpanel EBIT lSR lpL lpM lpPhC Year, model(bc95) dist(tn) emean(category3 category4 category5 Tourismspecialization ) ort(o)
Code:
initial: Log likelihood = -3.816e+09 Iteration 0: Log likelihood = -3.816e+09 could not calculate numerical derivatives -- flat or discontinuous region encountered could not calculate numerical derivatives -- flat or discontinuous region encountered Inefficiency effects model (truncated-normal) Number of obs = 3370 Group variable: UIC Number of groups = 348 Time variable: Year Obs per group: min = 1 avg = 9.7 max = 10 Prob > chi2 = . Log likelihood = -7.346e+05 Wald chi2(0) = . --------------------------------------------------------------------------------------- EBIT | Coef. Std. Err. z P>|z| [95% Conf. Interval] ----------------------+---------------------------------------------------------------- Frontier | lSR | 1086.5 . . . . . lpL | -840.1726 . . . . . lpM | -991.0253 . . . . . lpPhC | -122.3459 . . . . . Year | 18.04479 . . . . . _cons | -26225.4 . . . . . ----------------------+---------------------------------------------------------------- Mu | category3 | 1.016451 . . . . . category4 | 1.024072 . . . . . category5 | 1.004471 . . . . . Tourismspecialization | 1.001218 . . . . . _cons | 1.047579 . . . . . ----------------------+---------------------------------------------------------------- Usigma | _cons | 22.82486 . . . . . ----------------------+---------------------------------------------------------------- Vsigma | _cons | 434.1319 . . . . . ----------------------+---------------------------------------------------------------- sigma_u | 90438.91 . . . . . sigma_v | 1.86e+94 . . . . . lambda | 4.85e-90 . . . . . ------------------------------------------------------------------------------
The dependent variables is EBIT and it can take negative value that is why I do not generate it into ln forms. Do you think that the problem is the negative values of some units or something else?
I will be so grateful if anyone can help me.
Thank you in advance.
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