# How to estimate translog production functions?

i want to estimate a translog production function, i used ols, but want to estimate elasticity of variable, how can i do this? and how can print or see the exact mount of variables used in estimation?

i want to estimate a translog production function, i used ols, but want to estimate elasticity of variable, how can i do this? and how can print or see the exact mount of variables used in estimation?

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Use the PRINT command to print variables. eg:

```
print y x1 x2
```

Following any estimation, the number of variables and the number of observations used in the estimation are stored in the temporary variables $\$K$, $\$N$ respectively and may be printed the same way. eg.

```
print $K $N
```

Two useful examples of working with translog cost functions are here:

http://shazam.econ.ubc.ca/student/greene/cost4.sha

http://shazam.econ.ubc.ca/student/berndt/chap9.sha

For a production function the steps are usually:

```
* Read data from a file
read(somedata.shd) Y X1 X2
* Set sample size to work with
sample 1 100
* Create logs of the variables
genr logY=log(Y)
genr logX1=log(X1)
genr logX2=log(X2)
genr index=time(0)
* Calculate cross product manually (or convert to matrix)
genr logX12=logX1*logX2
genr logX11=0.5*logX1**2
genr logX22=0.5*logX2**2
genr index2=index**2
* OLS estimates of the coefficients of the translog production function
ols logY logX1 logX2 logX12 logX11 logX22 index index2 / coef=beta
* Keep the number of variables
gen1 k=$k-1
* Show the coefficients previously saved
print beta
```

To compute elasticities you may use the STAT command to get the means of all variables. It is important to note that elasticities of log transformed variables are calculated differently.

```
* First copy the data to a matrix called Z (remember the constant)
genr const=1
copy logX1 logX2 logX12 logX11 logX22 index index2 const Z
* Calculating elasticities at mean
stat Z / mean=zbar
* Evaluate at the sample means
matrix M=zbar'beta
gen1 f=ncdf(M)
gen1 fden=exp(-M*M/2)/sqrt(2*$pi)
* Calculate elasticities assuming variables are in levels.
sample 1 K
genr em=fden*beta*zbar/f
* Now calculate elasticities assuming log transformed variables.
genr eml=fden*beta/f
* Show the elasticities of log transformed variables
print eml
```

Source and further examples of various elasticity calculations with SHAZAM are here: http://econpapers.repec.org/software/shzshazam/probelas.htm

Asked: **
2011-08-23 02:02:39 +0000
**

Seen: **12,108 times**

Last updated: **Sep 22 '15**

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