[R] Non-Linear Regression (Cobb-Douglas and C.E.S)
James Wettenhall
wettenhall at wehi.edu.au
Fri Apr 16 15:05:53 CEST 2004
Mohammed,
> For estimating Cobb-Douglas production Function [ Y = ALPHA *
> (L^(BETA1)) * (K^(BETA2)) ], i want to use nls function
> (without linearizing it). But how can i get initial values?
This might be a dumb question, but why do you need nonlinear
regression for that model? It is linear after taking logs:
log Y = log ALPHA + BETA1 log L + BETA2 log K
> 2. How can i estimate C.E.S Production Function [ Y = GAMA *
> ((DELTA*K^(-BETA)) + ((1-DELTA)*L^(-BETA)))^(-PHI/BETA) ]
Your second model (C.E.S. Prod. Fcn) does indeed look nonlinear,
and I'm sorry I can't think how to find a good point
around which to linearize. Can you guess some approximate
parameter values for some "typical" Y,L,K data?
If it's too hard to estimate parameters
for a model, maybe it's time to come up with a new model :)
Regards,
James
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