# st: Re: Re: RE: Nonlinear IV estimation in STATA

 From "Elaine Tan" <[email protected]> To <[email protected]> Subject st: Re: Re: RE: Nonlinear IV estimation in STATA Date Sat, 29 Apr 2006 11:50:45 +0800

Hi - Information that I left out earlier: B measures size of market demand, A is maximum willingness to pay.

Hope this clarifies things. Many thanks, Elaine

----- Original Message ----- From: "Elaine Tan" <[email protected]>
To: <[email protected]>
Sent: Saturday, April 29, 2006 11:43 AM
Subject: st: Re: RE: Nonlinear IV estimation in STATA

Thanks - the demand function is modelled as:

Q = B(A-P)^2

rewritten as: lnQ = lnB + 2 ln(A-P) + u

So the function is nonlinear in A. I think I need nonlinear IV regression to estimate A?

(I have modelled the demand function as linear [Q=B(A-P)] and log-linear - these estimations were done using ivreg2)

I would like to use Amemiya's least-distance method (or Jorgensen's estimator), but I don't know how to ask stata to do it.

Any help will be much appreciated, Elaine

----- Original Message ----- From: "Schaffer, Mark E" <[email protected]>
To: <[email protected]>
Sent: Saturday, April 29, 2006 5:55 AM
Subject: st: RE: Nonlinear IV estimation in STATA

```Elaine,

```
```-----Original Message-----
From: [email protected]
[mailto:[email protected]] On Behalf Of Elaine Tan
Sent: 28 April 2006 02:45
To: [email protected]
Subject: st: Nonlinear IV estimation in STATA

Hi, I would like to estimate a quadratic demand function with
endogenous price-sq on the RHS that is instrumented by a few
regressions on STATA?
```
```I'm not sure I understand.  It sounds like your model is nonlinear in
variables but linear in parameters.  If so, then you don't need
nonlinear IV.  Standard linear IV will work just fine, so long as you
have instruments for your price-sq term.  But perhaps my description of
the model is incorrect.

--Mark

```
```Many thanks. Elaine Tan

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