Stata commands for Heterogeneity, transient and persistent technical efficiency using GTRE

[Lindikaya Myeki]

kindly assist with Stata commands to run GTRE model (Heterogeneity, transient and persistent technical efficiency)

[Andrew Musau]

There are several ways to estimate the Generalized True Random Effects (GTRE) model including the method of moments estimator by Kumbhakar, Lien and Hardeker (2012) and the simulated maximum likelihood approach of Filippini and Greene (2016). As of today, I do not think that anyone has gotten to coding the latter in Stata, but you can implement the former with a little investment of time as it does not involve a canned estimator.

References

Filippini, M., & Greene, W. (2016) " Persistent and transient productive inefficiency: a maximum simulated likelihood approach". Journal of Productivity Analysis, 45(2), 187-196.
Kumbhakar, S. C., Lien, G., & Hardaker, J. B. (2012). Technical efficiency in competing panel data models: a study of Norwegian grain farming. Journal of Productivity Analysis, 41(2), 321– 337.

[Lindikaya Myeki]

Thanks Andrew