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Question Number 1 Estimating Parameters of A Learning Curve: A) The Relationship Between LNUC and LNCP

This document discusses estimating parameters of a learning curve and testing the simple learning curve specification using microeconomic models. It contains two questions: 1) Estimating the relationship between log unit cost and log cumulative production using a simple learning curve model. Variables, confidence intervals, and other output are displayed. 2) Estimating a multiple regression model and calculating omitted variable bias to test the simple learning curve specification. Formulas and output showing estimated coefficients, standard errors, and other results are presented.

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Mohammad Usaid Awan
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22 views

Question Number 1 Estimating Parameters of A Learning Curve: A) The Relationship Between LNUC and LNCP

This document discusses estimating parameters of a learning curve and testing the simple learning curve specification using microeconomic models. It contains two questions: 1) Estimating the relationship between log unit cost and log cumulative production using a simple learning curve model. Variables, confidence intervals, and other output are displayed. 2) Estimating a multiple regression model and calculating omitted variable bias to test the simple learning curve specification. Formulas and output showing estimated coefficients, standard errors, and other results are presented.

Uploaded by

Mohammad Usaid Awan
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Applied Microeconomics

Question Number 1
Estimating parameters of a learning curve
a) The relationship between LNUC and LNCP
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b) Simple learning curve model estimation :
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Variables LNUC
LNCP xxx
Confidence interval xxx
CONST xxxxxx
Confidence interval xxx
OBSERVATIONS xxx
R SQUARED xxxxxx
.
1
.
2
.
3
.
4
.
5
.
6
U
C
O
S
T
P
0 5000 10000 15000 20000 25000
CUMP
Applied Microeconomics


Question No: 2
Testing the simple learning curve specification
a) Estimating Multiple regression model

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b) Calculation of Omitted variable bias
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a
1
-b
1
= d
1
*b
2
(i)
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-0.2716671- (--------) = (--------) * (-------) = ----------
Thus equation (i) is verified as LHS is equal to RHS. The bias in this case is small because
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VARIABLES LNUC

LNCP - xxx ***
( xxx 2)
LNY Xxx
(xxx)
Constant xxx ***
( xxx )
Observations xxx
R-squared xxx
Standard errors in parentheses
*** p<0.01, ** p<0.05, * p<0.1

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