Thanks for the explanation. So, if I understand this,
the parameters are, or are forced to be, one and the same.
In that case, I can't see that you have a testable hypothesis,
or even a hypothesis. What you have ensured as a consequence
of your estimation is not an economic conjecture that needs to
be checked.
I'm reminded of a conversation I had in which I mentioned
that students from my university play ball games with
students from other universities on Wednesday. "Oh",
said the other person, from another university, "what
a coincidence, so too do students from my place". But
it wasn't a coincidence at all: it is all deliberate.
If Durham play Glasgow on Wednesdays, it follows ineluctably
that Glasgow play Durham on Wednesdays.
Nick
[email protected]
Gauri Khanna
> Thank you for your reply. I am sorry if I was not clear.
>
> The translog described in my email does not estimate Beta21,
> Beta31 and
> Beta32. The reason is because when one estimates the
> translog,, LnX1.LnX2 is
> the same as Ln.X2.LnX1, similarly for LnX2.LnX3=LnX3.LnX2
> etc.. These cross
> products are not viewed as different from each other and
> hence only one of
> the pair is estimated.
>
> But the homogeneity test requires equality between
> Beta(12)=Beta(21) etc in
> addition to the others..
>
> I am new with this test for homogeneity and am hoping that I
> have got it
> correct.
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