Decreasing return to scale

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s92225
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Joined: Thu Mar 24, 2011 6:07 pm

Decreasing return to scale

Postby s92225 » Thu Mar 24, 2011 6:22 pm

Hi all ,

I have been doing this question for a while but can't figure the answer

Given a cobb-douglas production function and we need to estimate if it's decreasing return to scale .
It's obvious that we have to take log from both sides , but when it comes to hypothesis testing , i have no idea .
Is Eviews possible to test
H0: B1+B2 >= 1
H1:B1 +B2 < 1

Please help . :roll:
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trubador
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Posts: 1520
Joined: Thu Nov 20, 2008 12:04 pm

Re: Decreasing return to scale

Postby trubador » Fri Mar 25, 2011 7:42 am

Search EViews manual/help for Wald Test (Coefficient Restrictions). You will be surprised...


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