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From |
"Sunhwa Lee" <qlee@ucdavis.edu> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
st: Interpretation of Translog production function |

Date |
Sat, 29 Sep 2007 01:29:43 -0700 (PDT) |

Dear Stata-users, My question is not related to Stata, but to general econometrics. I have an interpretational problem regarding coefficients of a Translog production function. The model is to see an effect of a regulatory variable on GDP: lnY = b + bK*lnK + bL*lnL + bKK*(lnK)^2 + bLL*(lnL)^2 + bR*lnR + bRK*(lnR)*(lnK) + bRL*(lnR)*(lnL) where R is for regulatory proxy and b's are for coefficient estimates. Q1) The data are divided into geographic groups. For most groups, bK and bLL got negative signs whereas bKK and bL are positive. Do the coefficients for capital--convexity w.r.t capital-- make an economic sense? Q2) Suppose that the above model as a whole gains a statistical significance over a restricted Cobb-Douglas model through a chi-square test, while some of variables are not significant. To calculate marginal effects of lnL, I use the first derivative of lnY w.r.t. lnL, that is, bL + 2*bLL*(lnL) + bRL*(lnR). If bL is not significant, then should I drop or keep bL to calculate the marginal effect of lnL on lnY? Any comments are welcomed. Sun H. * * For searches and help try: * http://www.stata.com/support/faqs/res/findit.html * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

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