Consider the following Cobb-Douglas production function Y = AKP1 LP2 i (where y is i i...

 

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Consider the following Cobb-Douglas production function Y = AKP1 LP2 "i (where y is i i output, A is the level of technology, K is the capital stock, and L is the labour force), which has been linearized here (by using logarithms) to look as follows: yi= o + Blki + B2li + ui Assuming that the errors are heteroskedastic, you want to test for constant returns to scale. Using a t-statistic, how would you proceed? Consider the following Cobb-Douglas production function Y = AKP1 LP2 "i (where y is i i output, A is the level of technology, K is the capital stock, and L is the labour force), which has been linearized here (by using logarithms) to look as follows: yi= o + Blki + B2li + ui Assuming that the errors are heteroskedastic, you want to test for constant returns to scale. Using a t-statistic, how would you proceed?