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From |
Norman M <normanmva@gmail.com> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
Re: st: Calculating elasticities with an endogenous covariate in a translog production function |

Date |
Mon, 2 Dec 2013 09:26:30 -0500 |

I'm sorry for not providing the code. The basic idea is as follows. I need to estimate a translog function, that by definition has the following form: LnY = b0 + b1*LnK + b2*LnL + b3*LnK*LnL + b4*LnK*LnK + b5*LnL*LnL where Y is output, K is capital and L is labor. Thus, Y is a function of K, L, and all possible interactions (K-L, K-K, L-L). Now, K and L are usually endogenous. For simplicity let's say only K is endogenous, and let's assume a good instrument is the number of firms in the market (nfirm). Using Greene's dataset, the code is Stata should be as follows: * Data use http://www.stata-press.com/data/r12/greene9 * Basic OLS regression (this one works!) reg lnv c.lnk##c.lnl c.lnk#c.lnk c.lnl#c.lnl * IV Regression ivregress 2sls lnv c.lnk##c.lnl c.lnk#c.lnk c.lnl#c.lnl (c.lnk = nfirm) The error message I got is: lnk included in both exogenous and endogenous variable lists r(498); I'm trying to find a way to carry out this IV estimation. Can somebody help me? Norman M On Sat, Nov 30, 2013 at 8:23 AM, Austin Nichols <austinnichols@gmail.com> wrote: > Norman M <normanmva@gmail.com> : > > Neither you nor Jason Russ <jasondruss@gmail.com> makes very clear > what quantity you want to estimate--is this a regression with log > output (lny) as the outcome? In that case, the elasticity is not > dy/dx but perhaps you want the semielasticity dlny/dx instead? > > If you want to increase the chance that someone responds, why not > follow the explicit guidance in the FAQ and show the command typed in > Stata? > > You might consider simply demeaning all your covariates to make the > coef on X1 equal to its marginal effect, e.g. > > set seed 1 > drawnorm X2 Z e, n(1000) clear > g X1=e/4+Z > g y=exp(X2+X1+X1^2/5+X1*X2/100+e) > g X1X1=X1^2 > g X1X2=X1*X2 > g ZX2=Z*X2 > g ZX1=Z*X1 > g lny=ln(y) > reg lny c.X1##c.X1 c.X2##c.X2 > margins, dydx(X1) > foreach v in X1 X2 { > su `v', mean > g double c`v'=`v'-r(mean) > } > reg lny c.cX1##c.cX1 c.cX2##c.cX2 > margins, dydx(cX1) > g cX1X1=cX1^2 > g cX1X2=cX1*cX2 > g ZcX2=Z*cX2 > g ZcX1=Z*cX1 > cap ssc inst ivreg2 > ivreg2 lny cX2 (cX1 cX1X1 cX1X2=Z ZcX1 ZcX2) > > but consider a -gmm- version for reasons given at > http://www.stata.com/meeting/snasug08/nichols_gmm.pdf > > Why would you want the atmeans option on -margins-? > > > On Fri, Nov 29, 2013 at 5:42 PM, Norman M <normanmva@gmail.com> wrote: >> Hi everyone, >> >> I'm having the same problem that Jason posted, and I did not find a >> solution in the statalist. I was wondering if someone has a solution. > > refers to: > http://www.stata.com/statalist/archive/2013-10/msg00034.html > * > * For searches and help try: > * http://www.stata.com/help.cgi?search > * http://www.stata.com/support/faqs/resources/statalist-faq/ > * http://www.ats.ucla.edu/stat/stata/ * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/faqs/resources/statalist-faq/ * http://www.ats.ucla.edu/stat/stata/

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