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.