I have not read nor have access to the following papers, but might be helpful:
Battese GE (1997). A note on the estimation of Cobb-Douglas production
functions when
some explanatory variables have zero values. Journal of Agricultural
Economics, 48(2):250-
252.
Moss, Charles B (2000). Estimation of the Cobb-Douglas with Zero Input Levels:
Bootstrapping and Substitution. Applied Economics Letters 7(10):
677-9.
Scott
On Wed, Jul 2, 2008 at 4:46 AM, Viktor Slavtchev <[email protected]> wrote:
>
> dear stata listers,
> I want to estimate production function in logs in order to interpret the coefficients in terms of elasticities. one of the RHS variables has a lot of zero value. in such cases, some people usually add a very small value in order to avoid the problem of 'undefined' log of zero. a similar issue was discussed some time ago among other things and in a quite different context but an interesting alternative suggestion was made (which I can't remember anymore). unfortunately, I was not able to find this particular thread.
> in that sence, any suggestions how to deal with the problem would be greatly appreciated
> thanks a lot
> viktor
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