* Delta Method Estimation of Model for Demand for Gasoline * * Keywords: * regression, ols, log, gasoline, demand, nonlinear, delta, method * * Description: * We illustrate how to estimate a nonlinear model for Demand for Gasoline * using a Delta Method * * Author(s): * Noel Roy * Skif Pankov * * Source: * William H. Greene, Econometric Analysis - 7th Edition * Pearson International Edition, Chapter 4, Example 4.4 (page 109) * * Setting the first time period to be equal to year 1947 with periodicity of * one year time 1953.0 1 sample 1953.0 2004.0 * Reading the datafile and naming the variables, specifying to ignore the * first line of the file read (TableF2-2.shd) year gasexp pop gasp income pnc puc ppt pd pn ps / skiplines = 1 * Generating logs of variables genr lngpop = log(gasexp/pop/gasp) genr lnincome = log(income) genr lnpg = log(gasp) genr lnpnc = log(pnc) genr lnpuc = log(puc) * Generating lngpop, lagged once - lngpop1 genr lngpop1 = lag(lngpop) * Resetting the sample sample 1954.0 2004.0 * Running OLS regressions of lngpop on lnpg, lnincome, lnpnc, lnpuc and * lngpop1, specifying to print the covariance matrix of estimated coefficients and * that it's a log-log model and ols lngpop lnpg lnincome lnpnc lnpuc lngpop1 / loglog pcov * Estimating the values and standard errors for the long-run elasticities test lnpg/(1-lngpop1) test lnincome/(1-lngpop1) stop