Reconsider the production function for rice estimated in Exercise 5.24 using data in the file rice.dat: lnPROD b1 b2 lnAREA b3 lnLABOR

Reconsider the production function for rice estimated in Exercise 5.24 using data in the file rice.dat:

lnðPRODÞ ¼ b1 þ b2 lnðAREAÞ þ b3 lnðLABORÞ þ b4 lnðFERTÞ þ e

(a) Using a 5% level of significance, test the hypothesis that the elasticity of production with respect to land is equal to the elasticity of production with respect to labor.

(b) Using a 10% level of significance, test the hypothesis that the production function exhibits constant returns to scale—that is, H0:b2 þ b3 þ b4 ¼ 1.

(c) Using a 5% level of significance, jointly test the two hypotheses in parts

(a) and

(b)—that is, H0:b2 ¼ b3 and b2 þ b3 þ b4 ¼ 1.

(d) Find restricted least squares estimates for each of the restricted models implied by the null hypotheses in parts (a),

(b) and (c). Compare the different estimates and their standard errors.