how to add linear restriction

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ch2324
Posts: 133
Joined: Fri May 10, 2013 10:52 am

how to add linear restriction

Postby ch2324 » Thu Nov 14, 2013 9:17 am

hi, i have simple question
how to add a linear restriction in a model

example: cobb douglas production function f(K,L)=A*[K^c(2)]*[L^c(3)]
y=f(K,L); A=c(1); log(K)=x; log(L)=z
y=c(1)+c(2)*x+c(3)*z

1/i would like to restricted c(3)=0,2 at first and show c(1) c(2) c(3) in output equation
2/second restriction c(2)+c(3)=1 and show c(1) c(2) c(3) in output equation

have you any idea

startz
Non-normality and collinearity are NOT problems!
Posts: 3798
Joined: Wed Sep 17, 2008 2:25 pm

Re: how to add linear restriction

Postby startz » Thu Nov 14, 2013 9:27 am

hi, i have simple question
how to add a linear restriction in a model

example: cobb douglas production function f(K,L)=A*[K^c(2)]*[L^c(3)]
y=f(K,L); A=c(1); log(K)=x; log(L)=z
y=c(1)+c(2)*x+c(3)*z

1/i would like to restricted c(3)=0,2 at first and show c(1) c(2) c(3) in output equation
2/second restriction c(2)+c(3)=1 and show c(1) c(2) c(3) in output equation

have you any idea
There isn't a way to "show" the restricted coefficients in the output, but you can do the estimation by
y = c(1)+c(2)*x+0.2*z

and
y = c(1)+c(2)*x+(1-c(2))*z

EViews Glenn
EViews Developer
Posts: 2682
Joined: Wed Oct 15, 2008 9:17 am

Re: how to add linear restriction

Postby EViews Glenn » Fri Nov 15, 2013 4:15 pm

If you then do a Wald test with the expression for the restricted value, EViews will give you the equivalent t-statistics...

ch2324
Posts: 133
Joined: Fri May 10, 2013 10:52 am

Re: how to add linear restriction

Postby ch2324 » Sat Nov 16, 2013 12:45 pm

thank's for your help and your reply MR startz and MR Glenn.


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