Hi there,
I would like to ask for guidance on how to estimate the Boone indicator for the banking sector, using Stata commands - this should include a description of how the data is organized in excel (an example of this would be highly appreciated). For those who do not know the Boone indicator - it measures the elasticity of profits or market shares to changes in marginal cost (average of the firms included in the estimation). Its estimation comprises of three steps. First, the panel estimation of the translog cost function. Second, the estimation of marginal cost (derivative of the translog cost function). Third, estimating the relationship between marginal cost and profits or market shares (depending on the preferred measure of performance). It is the aforementioned steps that I would like practical guidance on.
Thank you in advance for your help.
I would like to ask for guidance on how to estimate the Boone indicator for the banking sector, using Stata commands - this should include a description of how the data is organized in excel (an example of this would be highly appreciated). For those who do not know the Boone indicator - it measures the elasticity of profits or market shares to changes in marginal cost (average of the firms included in the estimation). Its estimation comprises of three steps. First, the panel estimation of the translog cost function. Second, the estimation of marginal cost (derivative of the translog cost function). Third, estimating the relationship between marginal cost and profits or market shares (depending on the preferred measure of performance). It is the aforementioned steps that I would like practical guidance on.
Thank you in advance for your help.
