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How to calculate profit frontier for banks? SFA
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Hey I tried to calculate the potential profit for banks (pbt) via SFA (Stochastic Frontier Analysis)
lp = log of actual profits
lnpi = log 1
pbt = profit for tax
Unfotunaltey i got for each bank the same value of potential pfrofits- what i did wrong? :
Formula:
frontier lp lnpi `v2', technique(dfp)
predict plp, xb
gen pbt = exp(plp)
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