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From |
Austin Nichols <[email protected]> |

To |
[email protected] |

Subject |
Re: st: AW: AW: Creating a variable taking the value of elasticity |

Date |
Tue, 8 Sep 2009 12:02:40 -0400 |

Dorothy Bridges<[email protected]>: The main problem I see there is one of inferring causality--does an exogenous increase in GDP cause an increase in "health" or does an increase in "health" cause increased production or does some other factor increase both? You might want -xtivreg- but then you need appropriate excluded instruments... On Tue, Sep 8, 2009 at 11:10 AM, Dorothy Bridges<[email protected]> wrote: > Thanks so much, everyone, that answers my question. (And thanks Roger > for pointing me to the helpful package). I have one last question: I > am trying to understand the "elasticity" of a health indicator with > respect to GDP (that is, how does a marginal increase in GDP affect > the health indicator?). If I regress ln(healthindicator) on ln(gdp), > is the coefficient on ln(gdp) an appropriate way of measuring this > elasticity? I realize this is more of an econometrics question than a > Stata question, but everyone has been so helpful I thought I'd might > as well ask. > > Thanks again, > Dorothy > > On Tue, Sep 8, 2009 at 10:52 AM, Austin Nichols<[email protected]> wrote: >> Dorothy Bridges<[email protected]>: >> The linear model and the log-log model make very different assumptions >> about the data-generating process, so you should not expect to get the >> same estimates from them. -mfx- after a linear model in particular >> will give approximate estimates that are very questionable--note that >> if the true model is >> y=Xb+e >> then the elasticity of y with respect to x (a variable, or column of >> X) will vary as x varies. >> >> On Tue, Sep 8, 2009 at 10:32 AM, Dorothy Bridges<[email protected]> wrote: >> I still >>> don't see, then, how mfx, eyex gives me a value different than the >>> coefficient on lnx in regress lny lnx. Thanks again for all your >>> thoughts. * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**Re: st: AW: AW: Creating a variable taking the value of elasticity***From:*Dorothy Bridges <[email protected]>

**References**:**Re: st: AW: AW: Creating a variable taking the value of elasticity***From:*Dorothy Bridges <[email protected]>

**Re: st: AW: AW: Creating a variable taking the value of elasticity***From:*Maarten buis <[email protected]>

**Re: st: AW: AW: Creating a variable taking the value of elasticity***From:*Dorothy Bridges <[email protected]>

**Re: st: AW: AW: Creating a variable taking the value of elasticity***From:*Austin Nichols <[email protected]>

**Re: st: AW: AW: Creating a variable taking the value of elasticity***From:*Dorothy Bridges <[email protected]>

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