copulaSQM

Copula-Based Stochastic Frontier Quantile Model

Description

copulaSQM implements a copula-based stochastic frontier quantile model using the asymmetric Laplace distribution (ALD) and simulated likelihood estimation.

The model extends classical stochastic frontier analysis (SFA) by:

• Estimating conditional quantile frontiers
  
• Allowing asymmetric error distributions
  
• Modeling dependence between noise and inefficiency via copulas

This framework is suitable for applied production analysis, efficiency measurement, and heterogeneous performance evaluation.

Model

The production model is:

[ Y_i = X_i + V_i - U_i ]

where:

• ( V_i ) follows an asymmetric Laplace distribution
  
• ( U_i ) is a one-sided inefficiency term
  
• Dependence between ( V_i ) and ( U_i ) is modeled using copulas available in VineCopula

Installation

```r # install.packages(“devtools”) devtools::install_github(“woraphonyamaka/copulaSQM”)

library(copulaSQM)