levpet

[Sveta Paraschivescu]

I have firm level data and I want to estimate TFP and returns to scale using levpet. In my understanding, I could estimate TFP and returns at the firm level. However when I try to run lev pet for each firm I get this error message: only one cluster detected r(460). Am I missing something? can levpet estimate the productivity for each id? thank you very much

[Nick Cox]

Cross-posted at http://stats.stackexchange.com/quest...-cluster-error

This is a user-written program http://www.stata-journal.com/article...article=st0060 as you are asked to explain.

The question lacks a reproducible example with data and code. That could be one good reason why it has not so far received a direct reply.

[Sveta Paraschivescu]

You are right. My apologies. I guess I just need some help in understanding the code, more than the implementation, if there's someone familiar with it.

My question would be: the beta associated with the labor and the capital, is an average across firms and over time? so it's $\beta$ not $\beta_{i,t}$ ?

[Nick Cox]

Sorry, but I've never read the paper or used the program and don't work in this field. I'd focus on why you are getting error 460. You could set trace on to see where the message is coming from.