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| RE: Partial adjustment [ Reply ] By: Arne Henningsen on 2017-07-06 18:23 | [forum:45230] |
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Why can't you use lagged shares as demand shifters? With lagged budget shares, the standard adding-up conditions, including sum_i ( alpha_i ) = 1, remain unchanged but you have further adding conditions: sum_i ( delta_ij ) = 0 for all j, where delta_ij is the coefficient of the lagged budget share of good j in equation i. |
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| Partial adjustment [ Reply ] By: Shawn Kilpatrick on 2017-06-30 00:46 | [forum:45210] |
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Hello, I need to estimate an la-aids system with partial adjustment, so the budget share equation will have lagged share as one of the regressors. This will require that the constraints are modified so sum(alpha)=1 becomes sum(alpha)+lag coeff=1, while all the lag coefficient must be equal in each budget share equation. There are numerous obstacles, for example lagged share does not work as a demand shifter. Any insight on how I could modify the code to perform this analysis would be much appreciated. Thanks! |
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