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  • About significance for sigma v by applying Greene(2005) model in stochastic frontier analysis

    Dear Statalist,

    I've tried to analyze unbalanced panel data by applying Greene's model(2005) in stochastic frontier analysis.

    The code was as follows; sfpanel lny lnx charno_dum2 charno_dum3 lnxd2 lnxd3, model(tfe)

    where "charno_dum2" and "charno_dum3" are dummy variables representing the characteristics of the projects.(reference group : charno_dum1)
    "lnxd2" and "lnxd3" are interaction terms between the independent variable(lnx) and each dummy variable.

    The results showed that only sigma_v was not significant as follows;

    Click image for larger version

Name:	results_Greene(2005) model.png
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ID:	1729864


    How can I interpret this result?
    Thank you in advance.
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