## Defining constraints for coefficients

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Simplifier12
Posts: 18
Joined: Tue Sep 18, 2018 8:45 pm

### Defining constraints for coefficients

Hello,

I'm trying to estimate the following equation with variables X, Y, and Z, and coefficient a, b, and c, and there is requirement that a>=0:
Z = c + (a/X) + (bY/X)

I'm using estimation function in the Eview but it gives me negative value for a, which is not acceptable logically for my problem.

Could you please let me know how we can make constraints to coefficients?

Regards,
Amir

EViews Gareth
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### Re: Defining constraints for coefficients

Simplifier12
Posts: 18
Joined: Tue Sep 18, 2018 8:45 pm

### Re: Defining constraints for coefficients

EViews Gareth wrote:http://forums.eviews.com/viewtopic.php?f=4&t=48&p=99

Thanks. I have already read the post, but cannot figure it out and also implement it the 'Quick Estimate' function.

Could you help me out here?

Simplifier12
Posts: 18
Joined: Tue Sep 18, 2018 8:45 pm

### Re: Defining constraints for coefficients

EViews Gareth wrote:http://forums.eviews.com/viewtopic.php?f=4&t=48&p=99

Hello Gareth,

I read the entire post, but I'm still confused how to make the constraint (a=>0) to my equation. I used both the Exp and Log solutions but either I get errors or negative values which does not make sense.

Could you give me some tips?

EViews Gareth
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### Re: Defining constraints for coefficients

That post pretty much gives all the details.

Simplifier12
Posts: 18
Joined: Tue Sep 18, 2018 8:45 pm

### Re: Defining constraints for coefficients

EViews Gareth wrote:That post pretty much gives all the details.

Yes, but my background is not at all math and I'm a dummy in math. The post says for a constant no larger than 1 we better use 1-exp(a). Since mine is a constant no smaller than zero, I dont know how to do the conversion using 1-exp(a).

Simplifier12
Posts: 18
Joined: Tue Sep 18, 2018 8:45 pm

### Re: Defining constraints for coefficients

Need urgent help with my problem. Please!!!

I'm having the following equation and I need the constant (a) to be no smaller than zero:
Z = c + (a/X) + (bY/X)

I have already read the related post: viewtopic.php?f=4&t=48&p=99 , which says for one-sided constraints like for the constant c no larger than 1 we should use [1-Exp(c)] hack. Mine is no smaller than zero, but I cannot figure out if I should put -Exp(c) or Exp(c) or sth else.

In case I use Exp(c), in the result table brings me the value of -0.25 as coefficient and Exp(0.64) next to the corresponding variable. But it does not make sense to me since how the answer of an Exp can be negative? I also used -Exp(c), but again it gave me nonsense results. The coefficient value of 0.62 for -Exp(-0.254). I even dont know if I should ignore whatever value the tables shows inside Exp or it should be considered when calculating the primary constant.

Even though my constraint is one sided, I also used the two sided hack of (H-L)*@Logit(c(2)) + L because it was giving more generic rules for making constraints. I imagined my constraint to be 0=<a<=2 and I changed the upper value to see how the results would change accordingly. For 0=<a<=2, I got the coefficient value of -0.60 for 2@Logit(-0.395) as the corresponding constant. Here again I even dont know if I should ignore whatever value the tables shows inside Logit or it should be considered when calculating the primary constant.

I also wonder if the method (Lease Squares) in estimation setting should be changed as the estimating constant is no longer linear because they are being put in non-linear expressions.

I'm a dummy in math.