regtestrel: Regression-based Measures of Deviation.

In clptheory: Compute Price of Production and Labor Values

Regression-based Measures of Deviation.

Description

This function computes various regression based measures of deviation between the vector of all possible relative labor values and the vector of all possible relative prices of production. It runs a log-log and a level-level regression of relative prices on relative values and tests the joint null hypothesis that the intercept is 0 and the slope is 1.

Usage

regtestrel(x, y)

Arguments

x	price vector (1 x n).
y	value vector (1 x n).

Value

A list with the following elements:

a0lg	Intercept in the log-log regression
a1lg	Slope in the log-log regression
r2lg	R-squared in the log-log regression
fstatlg	F-stat of the null hypothesis that a0=0 and a1=1 in the log-log regression
pvallg	P-value of the null hypothesis that a0=0 and a1=1 in the log-log regression
nlg	Number of observations in the log-log regression
a0lv	Intercept in the level-level regression
a1lv	Slope in the level-level regression
r2lv	R-squared in the level-level regression
fstatlv	F-stat of the null hypothesis that a0=0 and a1=1 in the level-level regression
pvallv	P-value of the null hypothesis that a0=0 and a1=1 in the level-level regression
nlv	Number of observations in the level-level regression

References

Basu, Deepankar and Moraitis, Athanasios, "Alternative Approaches to Labor Values andPrices of Production: Theory and Evidence" (2023). Economics Department Working Paper Series. 347. URL: https://scholarworks.umass.edu/econ_workingpaper/347/

Examples

# Input-output matrix
A <- matrix(
data = c(0.265,0.968,0.00681,0.0121,0.391,0.0169,0.0408,0.808,0.165),
nrow=3, ncol=3, byrow = TRUE
)
# Direct labor input vector (complex)
l <- matrix(
data = c(0.193, 3.562, 0.616),
nrow=1
)
# Real wage bundle
b <- matrix(
data = c(0.0109, 0.0275, 0.296),
ncol=1
)
# Gross output vector
Q <- matrix(
data = c(26530, 18168, 73840),
ncol=1
)
# Direct labor input vector (simple)
l_simple <- l
# Market price vector
m <- matrix(data = c(4, 60, 7),nrow=1)
# Uniform nominal wage rate
wavg <- m%*%b
# Vector of nominal wage rates
w <- matrix(data=rep(wavg,3),nrow=1)
# Value of labor power
v <- 2/3
# Compute prices of production using NI
ni1 <- ppnewint1(A = A,l = l,w = wavg[1,1],v=v,Q = Q,l_simple = l)
# Regression-based measures of deviation
regtestrel(x=ni1$ppabs,y=ni1$lvalues)

clptheory documentation built on April 4, 2023, 5:15 p.m.