[OPE-L:1528] Re: Testing LVT with I/O

Allin Cottrell (cottrell@wfu.edu)
Wed, 20 Mar 1996 10:56:59 -0800

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On Wed, 20 Mar 1996, Iwao Kitamura wrote:

> I think your testing the proportionality of price/value is
> valid for your purpose in the paper. I imagine the slight
> upward disparity of the slopes and the nagative constants
> in those four cases come from exclusion of depreciation
> which may be relatively larger in large mechanic industries.

The regressions are logarithmic (following Shaikh's methodology),
and hence the estimates of the intercepts are biased; one needn't
pay too much attention to the negative constants.

Allin Cottrell
Department of Economics
Wake Forest University