Measurement unit invariant coefficients in multiplicative-logarithmic functions

David I. Stern*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

It has been demonstrated that the coefficients of the non-multiplicative terms of a multiplicative-logarithmic function are dependent on the units used. In addition, Dickey-Fuller tests on the multiplicative terms are unit sensitive. It is demonstrated that a simple transformation circumvents these problems. It is still true that individual coefficients of logarithmic variables in such functions are meaningless and that the Dickey-Fuller test is disturbingly arbitary. However, the transformation appears to increase the meaningfulness of a technical change trend in a translog cost function.

Original languageEnglish
Pages (from-to)451-454
Number of pages4
JournalApplied Economics
Volume27
Issue number5
DOIs
Publication statusPublished - 1 May 1995
Externally publishedYes

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