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how to add linear restriction

Posted: Thu Nov 14, 2013 9:17 am
by ch2324
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

Re: how to add linear restriction

Posted: Thu Nov 14, 2013 9:27 am
by startz
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

Re: how to add linear restriction

Posted: Fri Nov 15, 2013 4:15 pm
by EViews Glenn
If you then do a Wald test with the expression for the restricted value, EViews will give you the equivalent t-statistics...

Re: how to add linear restriction

Posted: Sat Nov 16, 2013 12:45 pm
by ch2324
thank's for your help and your reply MR startz and MR Glenn.