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On estimating dynamic factor demands
Author(s) -
Mahmud S. F.,
Robb A. L.,
Scarth W. M.
Publication year - 1987
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.3950020106
Subject(s) - normalization (sociology) , dynamic factor , econometrics , factor (programming language) , computer science , factor analysis , economics , mathematical economics , sociology , anthropology , programming language
Many recent empirical studies on inter‐related factor demands involve factor demand functions whose arguments depend on the researcher's arbitrary normalization rule. This paper shows how sensitive the estimated elasticities are to the various normalizations that are possible. Alternatives that are not dependent on a normalization are suggested.