The translog production function is an approximation of the ces function by a secondorder taylor polynomial about, i. The restricted profit function and the application of the. The transcendental logarithmic cost function looks like. The estimation of the parameters of aggregate production functions is central to much of todays work on growth, technological change, productivity, and labor. In stata, commands such as xtabond and xtdpdsys have been used for these models. Chapter 5 chapters estimates of production function and returns to scale 5. Translog function is very commonly used it is a generalisation of the cobb.
Oct 24, 2018 in addition, because the translog production function is a second order approximation to other productioncost functions, the discretetime tornqvist index is a sensible choice even if the underlying true functional form is not a translog see, for example, hulten, 2001. The elasticities are evaluated at the sample means, so the means procedure is used to compute the sample mean cost shares and store this information in the dataset meanshares. Structural estimation of a flexible translog gravity model shawnw. The estimation of the parameters of a translog production with a single production factor permits to enlarge the vision related to the relationship between the output and the analyzed production. User guides and examples also are provided when downloading the software. Estimate of the elasticities of substitution of the ces and translog production functions in tunisia. Stata module to create new variables for a translog. Translog production function stata economics job market rumors. How to deal with multicollinearity in a translog production. The empirical estimation of production and cost functions is a standard exercise in econometrics. Pdf estimate of the elasticities of substitution of the ces. Production economics 49 1997 249254 the restricted profit function and the application of the generalised leontief and the translog functional forms mats a. The translog function form is widely applied in empirical studies for it is regarded as the second order approximation to the unknown function. Start stata 9 from the windows start menu programs, f.
General econometric questions and advice should go in the econometric discussions forum. When derived demand systems are obtained from a cost function, it is possible to estimate several elasticities of substitution along with price elasticities. We now turn to point estimation when the dependent variable is. Munich personal repec archive on the estimation of supply and demand elasticities of agricultural commodites santeramo, fabio gaetano 1 may 2014 online at. Tell us what you think about the sas products you use, and well give you a free ebook. Estimating a derived demand system from a translog cost function overview the transcendental logarithmic translog functional form can capture many of the attributes of a cost function that are implied by economic theory. Various alternative multiple regressions models are presented based on a single time. Examples of the types of papers include 1 expository papers that link the use of stata commands or programs to associated principles, such as those that will serve as tutorials for users. Estimate of the elasticities of substitution of the ces and translog. Estimation of cost functions and the study of cost efficiency. Introduces the latest developments in forecasting in advanced quantitative data analysis this book presents advanced univariate multiple regressions, which can directly be used to forecast their dependent variables, evaluate their insample forecast values, and compute forecast values beyond the sample period. Apr 11, 2014 stochastic frontier analysis, stochastic, frontier analysis, method of economic modeling, stochastic production, frontier models, formulation and estimation of stochastic frontier production. We now turn to point estimation when the dependent variable is output or gross revenue. Fitting a seemingly unrelated regression sureg manually stata code fragments the stata command sureg runs a seemingly unrelated regression sur.
The returns to scale for the translog function depends on the level of capital and labour. An excellent introduction to ml estimation with stata is provided by. Application of translog function to productivity estimation. First, we estimate translog models that allow for a more flexible production function and include inputs similar to the cobbdouglas models. Translog stochastic frontier models in estimating technical inefficiency and its.
Application of translog function to productivity estimation in imo state, nigeria the objectives of the study are to evaluate the impact of technology on productivity, and identify the factors limiting the use of improved agricultural technologies in imo state, nigeria. We use translog cost functions to estimate ownprice and substitution elasticities of input demands, economies of scale and average costs in mexican. Start with the little devil known as a translog production function, which is quite general but has parameter restrictions that imply cobbdouglas. Poi statacorp james levinsohn university of michigan national bureau of economic research abstract. Dear all, i am relatively new to stata and would like to know how to estimate the parameters of a translog production function with stata. Structural estimation of a flexible translog gravity model. In the econometric literature, these problems have been solved by using lagged instrumental variables together with the generalized method of moments gmm.
The stata command accompanying this note uses a golden section search algorithm to minimize that function. Pdf estimate of the elasticities of substitution of the. As explained in chapter 1, data on production costs at the level of individual rmmarketproduct is very rare, and for this reason costs. Im trying to find a way to carry out this iv estimation. It was concluded that improved agricultural technologies had significantly impacted on agricultural productivity in imo state. The importance of a specific functional form is that it can be used in empirical work. The frontier production function or production frontier is an extension of the familiar regression model based on the theoretical premise that a production function, or its dual, the cost function, or the convex conjugate of the two, the profit. Make as much fun of me as you want but please help me out too. Elasticities of substitution are an important measure of production relationships. For the regression with a translog function, it is need to create a combination of the fundmental variables. Cobbdouglas, translog stochastic production function and.
Estimating a derived demand system from a translog cost function. Pdf some aspects of the translog production function estimation. Calculating elasticities from a translog cost function. Estimating translog cost function for technical questions regarding estimation of single equations, systems, vars, factor analysis and state space models in eviews. On the estimation of supply and demand elasticities of. Estimating a derived demand system from a translog cost. How can i calculate the translog cost function for cross section data. This can be done by ols, whereas, a greater efficiency might be obtained by using zellner efficient zef estimation. From norman maldonado estimate the following translog production function. Hi stat users, i want to estimate marginal cost using the translog cost function in stata. Do not update the version that is installed on your machine. If this is the case, one must seriously question not only cobb and douglas original results, but the plethora of estimations carried. Data and parameter estimates were previously stored in datasets est and klems in the example estimating a derived demand system from a translog cost function. Before starting your tasks, make sure that the following windows are visible on your screen and choose their size so that they do not overlap.
Checking for variance inflation factor vif and ensuring that it is less than 10 therefore, if. Fitting a seemingly unrelated regression sureg manually. Hey all, im estimating my translog cost function, with panel data for 33 different countries, 10 years on individual bank data. Hi, if anyone know from where i can get stata code to implement a translog production function then please let me know. In contrast, estimation of the production frontier assumes that the boundary of the.
Dear stata users, i am relatively new to stata and would like to know how to estimate the parameters of a translog production function with stata. International journal of agriculture and rural development. Introduction the estimation of rmscost functions in empirical io plays an important role in any empirical study of industry competition. Fitting a seemingly unrelated regression sureg manually stata code fragments. Substitute the values of these parameters into the translog cost function, and estimate its remaining three parameters, c, cq, and dqq, using linear multiple regression. Bergman department of economics, university of umea, s901 87 ume sweden received 12 october 1995. Translog cost function posted 04092009 663 views i am having a problem writing the code for a translog cost function does anyone have any references to share. A bootstrap approach discussed shortly is used to construct standard errors for. The name translog stands for transcendental logarithmic.
Maximum likelihood estimation and nonlinear least squares. I am not interested in the estimation of the efficiency as suggested by the command xtfrontier but rather in the estimation of the elasticities of output with respect to my three inputs. Some aspects of the translog production function estimation. Is there a reason why the estimation for coefficient for lk is not significant in both within and random. Translog production function stata economics job market. The estimation of sf models is already possible using official stata routines.
Maximum likelihood estimation and nonlinear least squares in stata christopher f baum faculty micro resource center boston college july 2007 christopher f baum boston college fmrc ml nl in stata july 2007 1 53. For the regression with a translog function, it is need to create a combination of the. In this paper we fully develop the argument that all the estimation of the cobbdouglas function does is to reproduce the income accounting identity that distributes value added between wages and profits. That is a regression in which two or more unrelated outcome variables are predicted by sets of predictor variables. So, we drop one of the three equations and we estimate only two equations. Scott long and jeremy freese use these commands in their book, regression models for categorical dependent variables using stata. These predictor variables may or may not be the same for the two outcomes. Empirical estimates of aggregate production functions are a tool of analysis essential in macroeconomics, and. The estimated coefficients of the translog production and cost functions will vary with the parameters sigma, nu, alpha, beta and gamma of the ces production function. Munich personal repec archive on the estimation of supply and demand elasticities of agricultural commodites santeramo, fabio gaetano. If you have an ancient version of stata you can get the spost9 commands instead. What are the different methods for dealing with multicollinearity in a translog production function. Checking for variance inflation factor vif and ensuring that it is less than 10 therefore, if vif 10, eliminate the variables in a stepwise way.
Estimate of the elasticities of substitution of the ces and translog production functions in tunisia article pdf available in international journal of economics and business research 93. Quantitative techniques term 2 albert banalestanol. Estimation of technical change and price elasticities. Pdf on the basis of the ces and translog production functions, this study compares the degrees of. I am not interested in effciency but rather in the estimation of the elasticities of output with respect to my three inputs. But, the problem with zef raise when we arbitrarily drop one of.
For the latest version, open it from the course disk space. I am in a very tight situation so i will be very very highly thankful. Theworldbank december20 abstract arkolakis, costinot and rodriguezclare 2012 show that many. Trying to do both at the same time, however, leads to serious estimation difficulties. You can estimate this equation by regressing log y on logk and logl, getting coefficient estimates. Learn about the ttest, the chi square test, the p value and more duration. This document briefly summarizes stata commands useful in econ4570 econometrics and econ6570 advanced econometrics. Various alternative multiple regressions models are presented. Production function estimation in stata using inputs to.
Stata module to estimate dynamic panel data models. Several commands for the postestimation interpretation of regression models. The transcendental logarithmic cost function looks like the. Please can i get the stata command for predicting the mc after estimating the translog.
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