# Tag Info

### How much do second-hand good purchases affect first-hand demand?

Coase (1972) has a classic treatments of this issue for monopolists selling durable goods. The general idea is that if Alice sells a textbook to Bob, Bob can resell it to Charlie when he is done with ...
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### Citing non-economics studies in an economics research paper

As long as the main results/conclusions of your paper don't rely solely on the non-economics literature you cite, you should be okay. In other words, it's perfectly fine to use non-economics ...
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### Estimating CES utility (not production) function parameters

It may be interesting to exploit the homothetic separability of the CES utility function in $x$. It implies that $$\frac{x_i}{x_j} = \left( \frac{\alpha_i}{\alpha_j}\frac{p_j}{p_i} \right)^\sigma$$ ...
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### Cobb-Douglas production function with expenditures rather than units

Sure you can, just that your interpretation of your variables in your analysis changes however. In this case you are analyzing how investment in differing factors of production affect output. I'd ...
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### Including an endogenous covariate in a regression model as a control to estimate the effect of another variable of interest

If I include $z_1$ in the model, like this: $$> y = \beta_0 + \beta_1 x + \beta_2 z_1 + e, >$$ Does that mean that $\beta_1$ is predominantly capturing the effect of $z_2$? Yes. This can be ...
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### Estimating CES utility (not production) function parameters

This answer closely follows the logic of estimation of translog cost function presented in Section 4.7 of Fumio Hayashi's "Econometrics". Define for convenience the CES aggregate price index ...
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### Derivation of index decomposition analysis

Unfortunately the paper is behind a paywall, so the answer is based entirely on your question. What is done under the hood to get the result is a rather straight forward log-linearisation and, hence, ...
• 1,652
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### Log Transformation of Zeros (Slave Trade Data)

Taking the logarithm of $0$ is impossible. This is a frequent occuring problem with econometricians who insist on using the log transform while having data with (many) zeros. There are a few options, ...
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### The Econometrics of the Stone Geary Production function

Stone-Geary production functions attempt to reflect the real-world observation that for production to be feasible, there exist minimum thresholds in the quantities of inputs employed. This is not ...
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### Estimating CES utility (not production) function parameters

These other answers seem to be citing some methods I haven't quite heard about yet however they all touch upon the idea developed by Czech economist named Jan Kmenta which has come to be known as the ...
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### In VAR models, do variations in the variables come solely from shocks?

My short answer is that if shocks are zero over the whole horizon (history, present, and future) then the variables in a VAR will not move at all, just as in a DSGE. You cannot assume a starting point ...
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### How accurate is duality?

Let me focus on the use of duality theory in demand analysis (as this is what I'm most familiar with). Direct approach Usually, in order to obtain a demand system (which you can then estimate) you ...
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There is a theoretical objection to using seasonally adjusted data, which I saw in an essay by Kalman (developer of the Kalman filter); sorry, I cannot find the reference. The argument is that ...
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### Difference between multinomial logit and conditional logit

It would be much better to have at least a head of your dataset to be sure, but from the description conditional logit is the way to go (though, in practice, random coefficients logit should be used ...
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### Difference-in-differences with long time horizon and repeated treatments

This question is related to a post I addressed on CrossValidated. The "generalized" difference-in-differences (DiD) estimator is amenable to settings with multiple groups and multiple ...
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### Synthetic Control Method

There are many ressources available online Synth is a statistical software that implements synthetic control methods for causal inference in comparative case studies with aggregate data as described ...
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### How does one deal with trending variables in Linear Regression?

Depends on a trend. Trends come generally in two categories: Deterministic trend - this can be controlled for using various methods. For example, in panel regression you could include time fixed ...
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