One standard way to deal with the key issue here is to use a generalized
linear model with logarithmic link.
Nick
[email protected]
[email protected]
Okay, so i try to describe what i want to do:
Actually i would like to come up with a linear demand function like
that:
Consumption= constant+ beta_1*Price+beta_2*Income+ ...
and a loglog demand function.
I used the spreadheet programm and manually calculated Consumption for
various prices and got the two demand functions from that, but
unfortunatly, due to the log transformation i have the following
problem:
exp(E(ln(Consumption))) is not equal to E(Consumption).
I thought more precise estimates would help-but as it turned out now-
they don't.
So, can I estimate the consumption for different prices directly in
Stata to get the demand functions?
Then, I should be able to deal with the retransformation bias as
suggested in Cameron&Trivedi(2009):Microeconometrics using 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/
