Cobb Douglas Function in Eviews 7.

[MelinaEm]

Hi!

I am trying to run a regression based on the following Cobb Douglas Production Function
Y = C K^a L ^b

I have been given data for K and L. How do I run a regression for it? My textbook just says take the natural logarithm of both sides and then run a regression. I dont understand how this translates the data which i am to put into Eviews...

Does this mean, I run the data, get the coefficients and insert them into my new equation where I have taken the log of both sides?

My main question is, how do I find the values of alpha and beta?

Sorry for possibly asking a stupid question. I would be extremly grateful for your help.

[christhebowler]

Taking logs transforms the nonlinear equation into something you can estimate using OLS.

log(Y) = log(K^a * L^b)
log(Y) = a*log(K) + b*log(L)