Estimation and inference under economic restrictions

Christopher Parmeter, Kai Sun, Daniel Henderson () and Subal Kumbhakar

Journal of Productivity Analysis, 2014, vol. 41, issue 1, 129 pages

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. Copyright Springer Science+Business Media New York 2014

Keywords: Restrictions; Equality; Inequality; Constraint weighted bootstrapping; Linear regression estimators; C12; C13; C14 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:jproda:v:41:y:2014:i:1:p:111-129

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DOI: 10.1007/s11123-013-0339-x

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