Frontier Functions:    Stochastic Frontier Analysis SFA  Data Envelopment Analysis DEA Preloader

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Production and cost functions. A researcher wishes to estimate a production function or a cost function. The object is to estimate not the average production or average cost, but the maximum possible production given a set of inputs or the minimum possible cost of a set of outputs. OLS regression estimates the mean of the dependent variable conditional on the explanatory variables; Quantile regression is based on a quantile (e.g. 10th,25th, median, 75th, 90th), not the maximum or minimum;25

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