Using the data set from Exercise 15.18, consider the model ln PRODit b1t b2t ln AREAit b3t ln LABORit b4t ln

Using the data set from Exercise 15.18, consider the model lnð Þ¼ PRODit b1t þ b2t lnð Þþ AREAit b3t lnð Þþ LABORit b4t lnð Þþ FERTit eit

(a) Estimate three seemingly unrelated regressions for the years 1995, 1996, and 1997 and report the results.

(b) What assumptions are you making when you estimate the equations in (a)? How would you interpret what was called contemporaneous correlation in Section 15,3? Is this correlation significant?

(c) Test the hypothesis that the input elasticities are the same in all three years.