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st: additional endogenous variable in a sur regression (translog)


From   Leslie <lneubecker@gmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   st: additional endogenous variable in a sur regression (translog)
Date   Thu, 23 Sep 2010 20:12:26 +0100

Dear stata listers,

To assess economies of scale I am estimating a translog model with
four inputs; k is short hand for capital, l for labour, f for fuel and
m for materials. lnpk, lnpl  etc. are the log of the input prices and
lnc is the log of total cost. I estimate the cost equation and the
cost share equations as a system and omit the share equation for
materials. (The cross terms lnpkpk etc. include the factor 0.5.)

To address the potential endogeneity of output, i.e. of lnq, I would
like to instrument it by an additional exogenous variable, lnoutput.



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