For a hypothetical case in class the following question is asked:
We have the following model: Y = β1+ β2*Area + β3Labor + β4*Fertilizer + u
Each labor day increases production with 0.01 ton, so β3=0.01, show how to estimate β2 and β4.
(Do not use Stata's possibility to do linear regression with linear restrictions)
The following variables are used in Stata:
prod (for Y)
area (for Area)
L (for labor)
F (for fertilize)
How can we fix a coefficient to 0.01, or are there other ways to solve this?
Thanks in advance!
With kind regards,
Pete
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