Hello all,

I am Florence Ijagbone. I am working on the social welfare function as part of my PhD programme on income inequality in Nigeria.

I want to know if its normal for Box- Cox regression, Lambda model to come up with 0.000 standard errors for the coefficients and sigma constant.

And please, how do I interprete the Sigma constant in the result?.

The regression result is shown below in the original output and tabular form:

Number of obs = 66
LR chi2(2) = 16.99
Log likelihood = -270.79042 Prob > chi2 = 0.000

------------------------------------------------------------------------------
socialwelf~e | Coefficient Std. err. z P>|z| [95% conf. interval]
-------------+----------------------------------------------------------------
/lambda | .3419019 .3273188 1.04 0.296 -.2996312 .9834351
------------------------------------------------------------------------------

Estimates of scale-variant parameters
----------------------------
| Coefficient
-------------+--------------
Notrans |
_cons | 6.590964
-------------+--------------
Trans |
meanincome | .0389765
ginicomple~t | .1702596
-------------+--------------
/sigma | .9716801
----------------------------

---------------------------------------------------------
Test Restricted LR statistic
H0: log likelihood chi2 Prob > chi2
---------------------------------------------------------
lambda = -1 -283.81911 26.06 0.000
lambda = 0 -271.4806 1.38 0.240
lambda = 1 -271.8932 2.21 0.138
---------------------------------------------------------


Social Welfare Function
------------------------------------
socialwelfare
------------------------------------
Intercept 6.591
(0.000)
Mean Income 0.039
(0.000)
Gini Complement 0.170
(0.000)
Intercept 0.342
(0.327)
Intercept 0.972
(0.000)
Number of observations 66
------------------------------------

Thank you for your kind contribution.

Florence Ijagbone