ABSTRACT
This chapter explores the advantages of employing the frontier estimation (FE) technique. It provides a detailed explanation of the manner in which such estimates can be obtained and an illustration based on FE procedures. The chapter notes that the concept and operationalization of political capacity have produced a thriving and highly promising literature. John Edwards discusses the limitations of ordinary least squares (OLS)-based estimates of relative political extraction and the advantages inherent in the FE technique. Although there are several ways to estimate stochastic frontier models, the analysis presented here is based on a technique developed by P. Schmidt and R. Sickles and extended by Cornwell, Schmidt, and Sickles, J. Hausman and W. Taylor and T. Amemiya and T. McCurdy. The chapter describes the specific procedures employed to construct FE-based estimates within the context of pooled cross-sectional, time-series data sets, followed by the estimations and a brief comparison to OLS-based estimates.
