Dear all,
first of all, thank you very much for your prompt answers. They were very helpful!
However I still have some doubts. I would like to estimate a gross revenue production function in a panel without entry/exit dynamics. Moreover, I would like to use "Investments" (which is not an input in the production function) as a proxy for TFP shocks and not "Intermediates" as in Levinsohn-Petrin.
(Ackerberg, Caves and Frazer (2006) shows that the Levinsohn-Petrin methodology suffers of a serious collinearity problem)
I cannot use -opreg- if I don't have firms leaving the markets. However, I also cannot use -levpet- since in this routine, when estimating a gross revenue production function, the proxy variable ("investments" in my case) is also considered as an input in the production function.
When I use the -opreg- routine and "pretend" that a single firm (over more than a thousand) leaves the market, the routine works and I get very reasonable estimates of the production function. Since I don't know exactly how the routine works, I would like to know if you think that I am making any major mistake that could affect my estimation.
Thank you so much,
Luigi
| On Mon, 15 Dec 2008 15:33:51 -0500
| "Rafal Raciborski" <[email protected]> wrote:
| luigi,
|
| for opreg to work, some firms must exit the market. if none does, you
| may use the user-written -levpet- command which controls for
| simultaneity but not the selection bias. -search levpet- will locate
| the command for you.
|
| best,
|
| rafal
|
|
|
| On Mon, Dec 15, 2008 at 2:37 PM, Luigi Pascali <[email protected]> wrote:
| > I need to estimate a production function using the olley-pakes semiparametric estimation procedure. I am using the routine -opreg- (developed by Yasar, Raciborski, & Poi).
| > I don't have firms that exit the panel and this seems to be a problem when running opreg.
| > The option "exit" in the command is required. For this reason I have constructed a dummy (that I called E) which is equal to 0 in each period for every firm.
| > Then I run the following command:
| > opreg lY, state(lK) proxy(lI) free(lL lM) exit(E)
| >
| > where lY=ln(sales)
| > lk=ln(fixed assets)
| > lL=ln(employees)
| > lM=ln(intermediates)
| > lI=ln(investments)
| >
| > I get the following message:
| >
| > an error occurred when bootstrap executed opreg
| > r(2000);
| >
| > I tried to run the same command "pretending" that some firms where leaving the market and everything worked fine.
| > I would really appreciate if anybody could tell me if I am making any mistake and how I can correct it.
| >
| > Many thanks,
| >
| > Luigi
| >
| > *
| > * For searches and help try:
| > * http://www.stata.com/help.cgi?search
| > * http://www.stata.com/support/statalist/faq
| > * http://www.ats.ucla.edu/stat/stata/
| >
| *
| * For searches and help try:
| * http://www.stata.com/help.cgi?search
| * http://www.stata.com/support/statalist/faq
| * http://www.ats.ucla.edu/stat/stata/
*
* For searches and help try:
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* http://www.stata.com/support/statalist/faq
* http://www.ats.ucla.edu/stat/stata/
