Levpet

[Emilie Pedersen]

Hi all

I am trying to estimate production functions using the Levinsohn Petrin build-in procedure in Stata.

Unfortunately, I have run into some difficulties.

When I run the regression for some of the countries in my data set, I get the following message from Stata:

“Insufficient variation to identify the capital and intermediate input coefficients separately. Bootstrapping for first-stage parameters only”, and Stata only estimates the labor coefficient.

For other countries, I either get material/capital coefficients of exactly 1 or extremely small coefficients.

Do any of you know how to solve these issues? I have tried to increase number of reps, but it doesn’t seem to help…

Regards, Emilie

[Julia Boltz]

Hi Emilie,

I have the same problem and was wondering, whether you were able to figure out the solution to the problem?

I would appreciate your help.

Thanks,
Julia