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Re: st: Olley Pakes using


From   Carl Nelson <chnelson@illinois.edu>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: Olley Pakes using
Date   Mon, 15 Dec 2008 13:48:52 -0600 (CST)

Luigi,

The nature of your data is exactly why Levinsohn and Petrin developed their alternative estimator. Most industries do not have the entry and exit that the telecommunications industry of the Olley Pakes article experienced.
Check findit levpet. The levpet help file contains the relevant references.

Carl Nelson

---- Original message ----
>Date: Mon, 15 Dec 2008 14:37:06 -0500
>From: Luigi Pascali <Luigi.Pascali@bc.edu>  
>Subject: st: Olley Pakes using   
>To: statalist@hsphsun2.harvard.edu
>
>I need to estimate a production function using the olley-pakes semiparametric estimation procedure. I am using the routine -opreg- (developed by Yasar, Raciborski, & Poi). 
>I don't have firms that exit the panel and this seems to be a problem when running opreg. 
>The option "exit" in the command is required. For this reason I have constructed a dummy (that I called E) which is equal to 0 in each period for every firm. 
>Then I run the following command:
>opreg lY, state(lK) proxy(lI) free(lL lM) exit(E)
>
>where lY=ln(sales)
>lk=ln(fixed assets)
>lL=ln(employees)
>lM=ln(intermediates)
>lI=ln(investments)
>
>I get the following message:
>
>an error occurred when bootstrap executed opreg
>r(2000);
>
>I tried to run the same command "pretending" that some firms where leaving the market and everything worked fine.
>I would really appreciate if anybody could tell me if I am making any mistake and how I can correct it.
>
>Many thanks,
>
>Luigi 
>
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