STATA - Placing a Constraint on a Constant

May 2010
1
0
I am running several iterations of a system of related equations. The first is four separate OLS equations estimating:

reg E_share lnp_cap lnp_lab lnp_energy lnp_mat
reg K_share lnp_cap lnp_lab lnp_energy lnp_mat
reg L_share lnp_cap lnp_lab lnp_energy lnp_mat
reg M_share lnp_cap lnp_lab lnp_energy lnp_mat

The second is a SUR regression of three of the four equations (the fourth is implicit):

sureg (eq1: E_share lnp_cap lnp_lab lnp_energy lnp_mat) (eq2: K_share lnp_cap lnp_lab lnp_energy lnp_mat) (eq3: L_share lnp_cap lnp_lab lnp_energy lnp_mat)

Finally, I would like to run a SUR regression as above, but with a constraint that the constants terms for all four equations sum to 1. I'm not sure what the syntax for this constraint is, as the variables I am imposing the constraint on are parameters and not actual variables in my data, and was wondering if someone has an idea of how to proceed. Thanks!
 
May 2010
1,034
272
This is a wild guess, so sorry if its unhelpful


Make up a new variable x_const with value 1 everywhere. Then run your SUR as before, but add x_const as a depvar to each equation.

Make sure you run with the noconstant option enabled. The constant in the new equations will be the "slope paramter" of the x_const variable.

This means the slope coefficient on the x_const variable will behave in the same way as the intercept term from your old equation. I think You can use constraints on that slope parameter in the 4 equations to get the output you want.

The constraint you want would be something like:
[E_share]x_const + [K_share]x_const +[L_share]x_const+[M_share]x_const = 1



An example of a sureg with constaints is here
Stata 11 help for estimation options
 
Last edited:
  • Like
Reactions: Davis2