Estimation and inference under economic restrictions

Christopher Parmeter, Kai Sun, Daniel J. Henderson, Subal C. Kumbhakar

Research output: Contribution to journalArticle

11 Citations (Scopus)

Abstract

Estimation of economic relationships often requires imposition of constraints such as positivity or monotonicity on each observation. Methods to impose such constraints, however, vary depending upon the estimation technique employed. We describe a general methodology to impose (observation-specific) constraints for the class of linear regression estimators using a method known as constraint weighted bootstrapping. While this method has received attention in the nonparametric regression literature, we show how it can be applied for both parametric and nonparametric estimators. A benefit of this method is that imposing numerous constraints simultaneously can be performed seamlessly. We apply this method to Norwegian dairy farm data to estimate both unconstrained and constrained parametric and nonparametric models.

Original languageEnglish (US)
Pages (from-to)111-129
Number of pages19
JournalJournal of Productivity Analysis
Volume41
Issue number1
DOIs
StatePublished - Jan 1 2014

Fingerprint

economics
regression
estimation procedure
farm
Inference
Economics
methodology
Estimator
literature
Dairy farms
Bootstrapping
Linear regression
Nonparametric model
Parametric model
Nonparametric regression
Methodology
Monotonicity

Keywords

  • Constraint weighted bootstrapping
  • Equality
  • Inequality
  • Linear regression estimators
  • Restrictions

ASJC Scopus subject areas

  • Business and International Management
  • Social Sciences (miscellaneous)
  • Economics and Econometrics

Cite this

Estimation and inference under economic restrictions. / Parmeter, Christopher; Sun, Kai; Henderson, Daniel J.; Kumbhakar, Subal C.

In: Journal of Productivity Analysis, Vol. 41, No. 1, 01.01.2014, p. 111-129.

Research output: Contribution to journalArticle

Parmeter, Christopher ; Sun, Kai ; Henderson, Daniel J. ; Kumbhakar, Subal C. / Estimation and inference under economic restrictions. In: Journal of Productivity Analysis. 2014 ; Vol. 41, No. 1. pp. 111-129.
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