/*
** Lesson 7.1: CES Production Function Revisited
** Judge, et. al. [1988], Chapter 12
*/
use gpe2;
output file=gpe\output7.1 reset;
load x[30,3]=gpe\judge.txt;

call reset;

_nlopt=0;    @ SSE minimization @
_method=5;   @ optimization method @
_iter=100;
_tol=1.0e-5;
_conv=1;
_vcov=1;

_b={1.0,0.5,-1.0,-1.0};

call estimate(&ces,x);

end;

proc ces(data,b); @ residual function @
    local l,k,q;
    l=data[.,1];
    k=data[.,2];
    q=data[.,3];
    retp(ln(q)-b[1]-b[4]*ln(b[2]*l^b[3]+(1-b[2])*k^b[3]));
endp;