Forum: help

RE: Imposing regional monotonicity - JPA paper 2009 [ Reply ] By: Arne Henningsen on 2017-01-07 15:52	[forum:43783]
1) Yes, the standard errors of all estimated parameters (i.e. including the z-variables) may be biased due to the use of a generated regressor. 2) No, you do not have to re-estimate step 3 again. caCoef are the final (restricted) coefficient estimates.

Imposing regional monotonicity - JPA paper 2009 [ Reply ]
By: Woon Kan Yap on 2016-12-29 18:21

[forum:43769]

Dear Dr Henningsen

Referring to the above article, I would like to ask a few questions as below:

1) Pg 220 - as Eq.12 includes a generated regressor, it is said that the standard errors obtained in the third step might be biased. I would like to confirm would the standard errors for the z-variables be affected as well? If the standard errors are biased, would they be biased upwards?

2) Pg 220 - In regards to Eq.14, it is said that an adjustment is necessary on parameters alpha_0 and alpha_1 and the commands for the adjustment are provided in appendix. I seem to be a bit loss at this juncture. What should I do with caCoef - the adjusted coefficients of the restricted production frontier? Do I have to re-estimate step 3 again?

Thanks