Dear All:
Follwing is an example from Stata website regarding the NL program
evaluator for the CES:
ln Q = b0 - 1/rho*ln{delta*K^-rho + (1-delta)*L^-rho}
where Q denotes output and b0, rho, and delta are parameters
to be estimated.
Now, suppose delta correlate with education as such: delta = delta_0 +
b*Edu. Using nl we can estimate delta_0 and b as follows:
nl ( ln Q = {b0} - 1/{rho}*ln({delta_0}+{b}*edu)*K^-{rho} +
(1-{delta_0}+{b}*edu))*L^-{rho})
My question is how we can estimate delta_0 and b if we write a program
evaluator. FYI, here is the program evaluator from Stata website:
program nlces
version 10
syntax varlist(min=3 max=3) [aw fw iw] if, at(name)
local logout: word 1 of `varlist'
local capital: word 2 of `varlist'
local labor: word 3 of `varlist'
// Retrieve parameters out of at matrix
tempname b0 rho delta
scalar `b0' = `at'[1,1]
scalar `rho' = `at'[1,2]
scalar `delta' = `at'[1,3]
// Some temporary variables
tempvar kterm lterm
generate double `kterm' = `delta'*`capital'^(-1*`rho') `if'
generate double `lterm' = (1-`delta')*`labor'^(-1*`rho') `if'
// Now fill in dependent variable
replace `logout' = `b0' - 1/`rho'*ln(`kterm'+`lterm') `if'
end
--
"My father gave me the greatest gift anyone could give another person,
he believed in me." - Jim Valvano
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