Two-Tier Stochastic Frontier Analysis for the Social Sciences

This textbook provides an up-to-date treatment of the two-tier stochastic frontier model and its applications across the social sciences. It is a cohesive treatise on both the classical methods of estimation and inference and various machinations of the two-tier stochastic frontier model, as well as more recently developed tools that can shed new insight into why these opposing latent forces which affect economic, sociopolitical, and even psychological outcomes, exist, and to what extent. The text is intended to be a self-contained reference for practitioners to rely on when using these methods in their research, regardless of field. It includes sixteen empirical applications on diverse topics (labor market, housing market, consumer goods, production economics, sociology, international relations, psychology, public education, healthcare management, environmental policy). The book is accompanied by a dedicated website where 2TSF software code in the R and gretl open-source platforms is provided.

Concepts and Metrics.- Introduction.- Metrics for the Latent Effects.- II Models and Applications.- Incomplete Information.- Bargaining.- A Jamboree of Latent Forces.- Binary Responses and Treatment Effects.- III Tools for Estimation and Inference.- Estimation Methods and Statistical Specifications.- Incorporating Heterogeneity in the 2TSF Model.- 2TSF Panel Data Models.- Allowing for Intra error Dependence.- Software for 2TSF analysis.- IV Extensions.- Extensions I 2TSF Tug of War Models.- Extensions II 2TSF Binary Response Models.- Extensions III Honey Pots and Epilogue.

Alecos Papadopoulos received his PhD in Economics from the Department of Economics of the Athens University of Economics and Business. He does research in econometrics, microeconomics and macroeconomics.

Christopher F. Parmeter is an associate professor at the University of Miami. He was formerly an assistant professor in the department of agricultural and applied economics at Virginia Polytechnic Institute and State University and a visiting scholar in Dipartimento di Studi su Politica, Diritto e Societa at the University of Palermo. He received his PhD in economics from the State University of New York at Binghamton. His research focuses on applied econometrics across an array of fields, including economic growth, microfinance, international trade, environmental economics, and health economics. He is currently Vice Editor at the Journal of Productivity Analysis and Co-Editor at Environmental and Resource Economics.