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Re: st: -levpet- with additional state variables - is it possible?

From   "Brian P. Poi" <>
Subject   Re: st: -levpet- with additional state variables - is it possible?
Date   Wed, 26 Mar 2008 08:20:45 -0500 (CDT)

On Wed, 26 Mar 2008, Matej Drev wrote:

Dear Statalist users,

I am trying to estimate a production function with two state variables - capital stock and r&d stock - using the -levpet- command. However, it seems that the Stata routine only allows for specification of one such variable - capital stock. Is there a way to estimate this production function in Stata using -levpet-?

I couldn't find help for this online, so I would appreciate any clarification on this.


The -levpet- command published in the Stata Journal (Petrin, Poi, & Levinsohn, 2004) only accepts one state variable. Modifying the estimator to accept multiple state variables would entail a huge amount of work.

Forthcoming in the Stata Journal is an article (Yasar, Raciborski, & Poi) that introduces the command -opreg- to fit a production function using the Olley and Pakes (1996) technique. -opreg- allows you to specify two state variables. Contact me privately ( if you'd like to get the command files.

-- Brian Poi


Olley, G. S. & A. Pakes. 1996. The dynamics of productivity in the
telecommunications equipment industry. Econometrica, 64(6): 1263-1297.

Petrin, A., B. P. Poi, and J. Levinsohn. 2004. Production function
estimation in Stata using inputs to control for unobservables.
Stata Journal 4(2): 113-123.

Yasar, M., Raciborski, R., & Poi, B. 2008. Production Function Estimation
in Stata Using the Olley and Pakes Method. Stata Journal, forthcoming.

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