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From |
Nick Cox <[email protected]> |

To |
[email protected] |

Subject |
Re: st: Estimating the CES-Translog Production Function |

Date |
Fri, 1 Apr 2011 10:25:18 +0100 |

The dots (.) mean "numeric missing". There could be several reasons why you are seeing such results, but the model did converge -- as you stated in your first posting. The precise interpretation differs, but the usual broad interpretation is that your model and data don't match at all well. You should try something simpler, or otherwise different. Gordon Hughes wrote this in a different but I think relevant thread <http://www.hsph.harvard.edu/cgi-bin/lwgate/STATALIST/archives/statalist.1103/Date/article-1743.html> Translog frontier models can be difficult to estimate under the best of circumstances without trying to over-determine the frontier. You should start by estimating the basic log-linear Cobb-Douglas form (dropping all of the interaction terms) and then introduce interactions individually and very carefully. Even then it is unlikely that you will get any convincing results with such a small sample. Now clearly Gordon need not agree with my borrowing -- and the specification "frontier" does not apply here, and I see no detail on your sample size(s) -- but the tone of caution seems appropriate. Nick On Fri, Apr 1, 2011 at 5:53 AM, Dawei Zhang <[email protected]> wrote: > Thanks for the advice. We tried really small steps (4e*10^-11), and also > only imposed the constraints to make sure the log expression is valid and > rho not equal to zero. However, we still couldn't get all the parameters to > converge (sometimes rho, sometimes delta_Z). Actually, I am beginning the > wonder what it means in stata if the estimation results for certain > parameters are just "dots". Does this mean the parameters not converged? or > the model is not identified? or singular matrix?.......... On 27/03/2011 7:02 AM, Charles Koss wrote: >> Two ideas come to mind: >> >> a) Try smaller step size between iterations. >> b) Try different numerical optimization techniques >> >> Can you describe the convergence without the constraints? On Sat, Mar 26, 2011 at 11:29 PM, Dawei Zhang <[email protected]> wrote: >> > I am having some convergence problems when estimating the CES-Translog >> > production function using the "nl" command in Stata. The program has >> > converged in terms of reaching a minimum residual sum of squares, >> > however >> > not all of the parameters converged to steady values. The estimation >> > form is >> > as following: >> > >> > ln(Output) = {alpha} -(1/{rho}) * ln[ {delta_Z} * Z^{-rho} + {delta_K} >> > * >> > K^{-rho} + (1 - {delta_Z} - {delta_K}) * L^{-rho} ] + {beta_ZZ} * >> > ln(Z)^{2} >> > + {beta_KK} * ln(K)^{2} >> > + {beta_LL} * ln(L)^{2} + {beta_ZK} * ln(Z) * >> > ln(K) + >> > {beta_LZ} * ln(L) * ln(Z) + {beta_LK} * ln(L) * ln(K) + epsilon , >> > >> > where Output, Z, K, and L are the data. We have 10 parameters to be >> > estimated: alpha, rho, delta_Z, delta_K, beta_KK, beta_LL, beta_ZZ, >> > beta_ZK, >> > beta_LZ, and beta_LK. We use re-parameterization (mainly using tanh() >> > and >> > invlogit()) to impose interval constraints on the parameters: alpha in >> > (-5,5), rho in (-2,2) but not equal to 0, delta_Z in (0,1), delta_K in >> > (0,1), 1 - delta_Z - delta_K>0 (we use multinomial logit to >> > reparameterize >> > this constraint), and all the rest parameters in (-1,1). >> > >> > After trying 2000 sets of starting values randomly selected from the >> > intervals mentioned above, we could not have all 10 parameters converge >> > at >> > the same time, especially for the two parameters: delta_Z and rho. We >> > tried >> > a few different datasets and this problem persists. Any suggestions on >> > how >> > we can solve this problem? * * 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/

**References**:**Re: st: Estimating the CES-Translog Production Function***From:*Dawei Zhang <[email protected]>

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