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Indexing of Technical Change in Aggregated Data

  • Sturla Furunes KvamsdalEmail author
Article
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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.

Keywords

Technical change Baltagi–Griffin general index Period dummies Trend estimation 

JEL Classification

C13 C43 O33 

Notes

Acknowledgements

The research was funded by the Research Council of Norway (Grant Nos. 234238/E40 and 257630/E10). I am grateful for comments from Linda Nøstbakken, Arnt-Ove Hopland, Johannes Mauritzen, and Martin Wörter.

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2017

Authors and Affiliations

  1. 1.SNF – Centre for Applied Research at NHHNorwegian School of EconomicsBergenNorway

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