Treatment Effect Stochastic Frontier Models with Endogenous Selection

Government policies are frequently used throughout the world to promote productivity. While some of the policies are designed to work through technology enhancement, others are meant to exert the influence through effciency improvement. It is therefore important to have a program evaluation method that can distinguish the channels of effects. We propose a treatment eect stochastic frontier model for this purpose. One of the important feature of the model is that the participation in the treatment is endogenous. We illustrate the empirical application of the model using the data of large dams in India to study the eects on the agricultural production.