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st: RE: Quadratic term validity

From   "Nichols, Austin" <[email protected]>
To   "'[email protected]'" <[email protected]>
Subject   st: RE: Quadratic term validity
Date   Wed, 10 Nov 2004 17:14:14 -0500

The `theory' is about declining marginal returns 
to X, or concavity, possibly with depreciation of 
human capital producing an actual decline, but not 
about a quadratic per se.  The usual justification 
of linear and quadratic terms is by analogy to 
Taylor series, so you could put in higher order 
terms, but not drop lower ones.

If you've got the log(age) in there, the quadratic 
in log(age) has no such justification, unless 
you've got some weird functional form assumptions.  
Note that log(age) is already concave in age!

-----Original Message-----
From: Nick Cox [mailto:[email protected]]
Sent: Wednesday, November 10, 2004 4:57 PM
To: [email protected]
Subject: RE: st: RE: Quadratic term validity

I'll bow to knowledge here, naturally, 


I still want to know if the quadratic follows 
_deductively_ from plausible postulates, 
or whether it just happens to be a convenient 
functional form for theorists to play with. 
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