Econometric estimation of the "Constant Elasticity of Substitution" function in R: the micEconCES package

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The Constant Elasticity of Substitution (CES) function is popular in several areas of economics, but it is rather rarely used in econometric analysis because it cannot be estimated by standard linear regression techniques. This chapter starts with a discussion of several approaches for estimating the traditional CES function with two inputs as well as nested CES functions with three and four inputs. It proceeds with the demonstration of how these approaches can be applied in R using the add-on package micEconCES and describes how the various estimation approaches are implemented in the micEconCES package. The chapter concludes with an illustration of the usage of this package by replicating some estimations of CES functions that are reported in the literature.
Original languageEnglish
Title of host publicationHandbook of Research Methods and Applications in Empirical Microeconomics
EditorsNigar Hashimzade, Michael A. Thornton
Number of pages45
PublisherEdward Elgar Publishing
Publication date2021
Pages596–640
Chapter20
ISBN (Print)978 1 78897 647 3
ISBN (Electronic)978 1 78897 648 0
Publication statusPublished - 2021
SeriesHandbooks of Research Methods and Applications

ID: 289233852