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Indexing of Technical Change in Aggregated Data

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  • Sturla Furunes Kvamsdal

    (Norwegian School of Economics)

Abstract

The Baltagi–Griffin general index of technical change for panel data has earlier been applied to aggregated data via the use of period dummy variables. Period dummies force modeling into estimation of the latent level of technology through choice of dummy structure. Period dummies also do not exploit the full information set because the order of observations within periods is ignored. To resolve these problems, I suggest estimating the empirical equation for all possible structures of the dummy variables. The average over the different dummy coefficient estimates provides an index of technical change. More generally, the method estimates a general, model-free trend in linear models. I demonstrate the method with both simulated and real data.

Suggested Citation

  • Sturla Furunes Kvamsdal, 2019. "Indexing of Technical Change in Aggregated Data," Computational Economics, Springer;Society for Computational Economics, vol. 53(3), pages 901-920, March.
    • Handle: RePEc:kap:compec:v:53:y:2019:i:3:d:10.1007_s10614-017-9771-8
    DOI: 10.1007/s10614-017-9771-8
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    References listed on IDEAS

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    More about this item

    Keywords

    Technical change; Baltagi–Griffin general index; Period dummies; Trend estimation;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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