Dear Amadou,
The easiest answer is that you do not need a simulation. The parameter of POP tells you how much GDP will increase as a result of an unit increase in population. So if the parameter of POP is .5 and GDP is 10, than an increase of 10 (doubling GDP) is achieved by and increase in the population of 20.
You could of course find a lot (infinite, actually) of combinations of increases in POP and INVEST that will lead to a 10 point increase in GDP. So you will have to make additional assumptions to narrow that down.
Beware of the assumed direction of causality: your model assumes that GDP is caused by POP and INVEST, so doubling GDP causes nothing, but is caused by POP and INVEST.
Hope this helps,
Maarten
-----Original Message-----
From: [email protected] [mailto:[email protected]]On Behalf Of [email protected]
Sent: donderdag 3 februari 2005 14:32
To: [email protected]
Subject: st: Simulation question
Hi,
I have a simulation problem.
Usually, what I've seen done in simulations is to change
values in independent variables and see their result on the
(predicted dependent variable).
Ex:
reg GDP pop invest
predict gdphat
su gdphat
replace pop =pop * 1.03 /* 3% growth of
population*/
predict gdphat2
su gdphat2
g diff = gdphat - gdphat2 /*Measure of the
impact of the population growth */
Now, here is my question:
Suppose I want to double my GDP ?
I am interested in how my independent variables will change (in their
coeffcients and/or in their observations ???)
to meet the new values of GDP.
I guess I am facing a constraint problem but do not know how to do this in
Stata.
How can I do that?
Best regards.
Amadou.
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