% ESTIMATION and HYPOTHESIS TESTING FOR A COBB-DOUGLAS PRODUCTION FUNCTION clc; %% Load Data & Define Variables M = importdata('matlabex14data.txt',' ',1); data = M.data; L = data(:,1); K = data(:,2); Q = data(:,3); n = size(data,1); constant=ones(n,1); lnQ=log(Q); lnl=log(L); lnk=log(K); %% OLS X=[constant lnl lnk]; k1 = size(X,2); Y=lnQ; bunrestrict=inv(X'*X)*(X'*Y) urerr = Y - X*bunrestrict; s2 = (urerr'*urerr)/(n - k1); %% unrestricted F test R=[0 1 1]; q=[1]; Funrestrict=((R*bunrestrict-q)'*inv(R*inv(X'*X)*R')*(R*bunrestrict-q))/(s2) %% restrict Ystar=lnQ-lnk; X1=lnl-lnk; Xstar=[constant X1]; brestrict=inv(Xstar'*Xstar)*(Xstar'*Ystar) urestrict=Ystar-Xstar*brestrict; Frestrict=(((urestrict'*urestrict)-(urerr'*urerr))/((urerr'*urerr)/(n-k1)))