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Re: st: estimate elasticity using LA-AIDS model


From   Jorge Eduardo Pérez Pérez <perez.jorge@ur.edu.co>
To   "statalist@hsphsun2.harvard.edu" <statalist@hsphsun2.harvard.edu>
Subject   Re: st: estimate elasticity using LA-AIDS model
Date   Fri, 17 Dec 2010 15:46:06 -0500

Your formulas to calculate elasticities seem to be wrong (you should
substract 1 when calculating own price elasticities) Check the
following reference for the correct expressions.

http://agecon2.tamu.edu/people/faculty/capps-oral/agec%20635/Readings/Elasticities%20in%20AIDS%20Models.pdf


Also, it would be easy to estimate the full AIDS with the nlsur
command instead of the LA-AIDS

http://www.stata-journal.com/sjpdf.html?articlenum=st0029

If you use R, you could also use Arne Henningsen's micEcon package

http://micecon.r-forge.r-project.org/
_______________________
Jorge Eduardo Pérez Pérez




On Thu, Dec 16, 2010 at 2:51 AM, jongin Kim <filetana@gmail.com> wrote:
> Dear members of this mailing list~
>  I’m trying to estimate elasticity of wheat import in Japan using LA-AIDS model.
> I used SUR(seemingly unrelated regression). I succeeded to get a
> result, but the problem is when I try to compute elasticity by using
> the regression result, most of the own price elasticity for USA, CAN,
> AUS becomes plus. Could you explain me what’s wrong with my analysis
> as follows? Or the thing that own price elasticity take plus value can
> be rationalized?
> Stata code
> --------------------------------------------------------------
> *Homogeneity condition*
>  constraint define 1 [qusa]pusa+[qusa]pcan+[qusa]paus+[qusa]prow=0
>  constraint define 2 [qcan]pusa+[qcan]pcan+[qcan]paus+[qcan]prow=0
>  constraint define 3 [qaus]pusa+[qaus]pcan+[qaus]paus+[qaus]prow=0
>
>   *Symmetry condition*
>  constraint define 4 [qusa]pcan=[qcan]pusa
>  constraint define 5 [qusa]paus=[qaus]pusa
>  constraint define 6 [qcan]paus=[qaus]pcan
>    *SUR with constraints*
>   sureg (qusa: wusa=pusa pcan paus prow xwp ) (qcan: wcan=pusa pcan
> paus prow xwp ) (qaus: waus=pusa pcan paus prow xwp ), constraints(1 2
> 3 4 5 6)
> --------------------------------------------------------------------------------------
>
> Results
>
> Compensated elasticity
>  USA               CAN              AUS
> USA 0.8056718 -0.335045 -0.4599036
> CAN -0.676183 0.1640552 0.47014533
> AUS -1.312479 0.6648092 0.66463825
>
>
> Uncompensated elasticity
>  USA              CAN    AUS
> USA 0.311614 -0.579848 -0.6330256
> CAN -1.424014 -0.206492 0.20809894
> AUS -1.74234 0.4518152 0.51401138
>
> Data set& result are as follows
>
> http://www.adrive.com/public/32740513c587c507d08390dcb846c6bb753142996103fb30c173f21c7b357a91.html
>
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