You can find the spreadsheets for this video and some additional materials here: drive.google.com/drive/folders/1sP40IW0p0w5IETCgo464uhDFfdyR6rh7 Please consider supporting NEDL on Patreon: www.patreon.com/NEDLeducation
Thank you for your detailed explanation and excel tutorial. Some clarification: Here you have taken cross-section data. Is it fine to do a similar exercise using time series data for a particular country? When we estimate C-D, the constant term (lnA) is taken as TFP. Then when we derive the coefficient using OLS (using LINEST)why can't we simply take it as the measure of TFP? Why do we have to again do output/input exercise?
Hi Setu, and thanks for the question! If you mean the LINEST function, then it is always 5 rows (first for coefficients, second for standard errors, row 3 and 4 report R-squared, standard error, F-stat, and degrees of freedom, and the final row reports ESS and RSS), and the number of columns is equal to the number of coefficients (three in this case). Hope it helps!
Hi, great video!! But sorry my ignorance, maybe I didn't get correctly, these exponents should be alpha and 1-alpha.. summing 1 always? Regards from Brazil!
Hi Vini, and glad you enjoyed the video! Excellent question as well, the exponents sum to 1 in the Cobb-Douglas function in case of constant returns to scale (i.e., doubling both the labour and capital stock doubles the output). Generally, the sum of exponents can be any positive number. If the sum is less than one, there are decreasing returns to scale, if it is higher than one, there are increasing returns to scale, and if it equals one, the returns to scale are constant. I showcase that in my video on Wald's test: ua-cam.com/video/J6oi1a4P7-0/v-deo.html
You can find the spreadsheets for this video and some additional materials here: drive.google.com/drive/folders/1sP40IW0p0w5IETCgo464uhDFfdyR6rh7
Please consider supporting NEDL on Patreon: www.patreon.com/NEDLeducation
very insightful
NEDL has become my favorite UA-cam channel. Thank you so much!
very nice video... I came for TFP and comprehend linear regression...
Thank you for your detailed explanation and excel tutorial.
Some clarification: Here you have taken cross-section data. Is it fine to do a similar exercise using time series data for a particular country? When we estimate C-D, the constant term (lnA) is taken as TFP. Then when we derive the coefficient using OLS (using LINEST)why can't we simply take it as the measure of TFP? Why do we have to again do output/input exercise?
wonderfully explained...kudos
Please make a video on the Translog production function.
Hi! Could I plug the historical data of one country only and compute the TFP over the years? Would it work?
Really amazing video!
Great video, thanks a lot!
great tutorial, thanks!
why did we choose 3*5 matrix, any exlaination?
Hi Setu, and thanks for the question! If you mean the LINEST function, then it is always 5 rows (first for coefficients, second for standard errors, row 3 and 4 report R-squared, standard error, F-stat, and degrees of freedom, and the final row reports ESS and RSS), and the number of columns is equal to the number of coefficients (three in this case). Hope it helps!
@@NEDLeducation thank you so much.
Hi, great video!! But sorry my ignorance, maybe I didn't get correctly, these exponents should be alpha and 1-alpha.. summing 1 always? Regards from Brazil!
Hi Vini, and glad you enjoyed the video! Excellent question as well, the exponents sum to 1 in the Cobb-Douglas function in case of constant returns to scale (i.e., doubling both the labour and capital stock doubles the output). Generally, the sum of exponents can be any positive number. If the sum is less than one, there are decreasing returns to scale, if it is higher than one, there are increasing returns to scale, and if it equals one, the returns to scale are constant. I showcase that in my video on Wald's test: ua-cam.com/video/J6oi1a4P7-0/v-deo.html
Can we use regression?