Stochastic Frontier Methods - Malmquist Productivity Growth Index - R Programming Assessment Answer

R Programming Assessment Task

(a)Estimate an input distance function frontier using stochastic frontier methods. Use the homogeneity property of the input distance function to be able to estimate the froniter as an SFA model using the ’frontier’ R package that is used to estimate produciton function frontiers.
(b)Calculate efficiency change overtime and technological progress and construct the Malmquist productivity growth index and the Malmquist productivity index (with period 1 as the base period).
(c)Examine other properties of the estimated technology, especially, elasticity of distance functions with respect to outputs and the returns to scale.

(d)Present and discuss your frontier estimation results (SFA estimates), the efficiency estimates, and technological change (TC) and (Malmquist) productivity growth rates. Use two tables, one for SFA estimates and another that has the original data and also generated values (efficiency, efficiency change, tc and productivity growth) as additional columns.
(e)Re-estimate the input distance function as a deterministic frontier using mathematical programming methods. Use ’apear’ package (Hailu 2013) for this; you can obtain the package from the instructor. How does estimating the frontier as a deterministic fron- tier affect your understanding of efficiency, technical change and productivity growth estimates.

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