Hi there everyone,
I have the following model (this is naturally a simplified version just for
showing my problem, in case you're wondering this is a translog cost
function with the associated cost share equations):
C ~ á + â1 log X + â2 log Y + ã1 log Z + ã2 log XX
C1 ~ â1 + â2 log YY + ã1 log ZZ
Then I have some restrictions on the coefficients, namely that the sum of â
equal 1 and the some of ã equal zero
So, I've added the following equations to the model
C2 ~ 0 + â1.Y1 + â2.Y2
C3 ~ 0 + ã1.Y3 + ã2. Y4
I've created columns in my data frame with values of 0 for variable C3 and
values of 1 for Y1, Y2, Y3, Y4 and C2
I'm using the systemfit package to solve a multiple equation system using
the SURE method, and using a matrix to impose the restrictions on the
coefficients (i.e., that the â1 in all equations is the same value, and the
same for all the other coefficients).
When I try to run the model without the restricting equations (C2, C3) it
runs just fine, but when I add these two equations I get the error:
"Error in solve(xtOmegaInv %*% xMat2, xtOmegaInv %*% yVec, tol = solvetol)
:
cs_lu(A) failed: near-singular A (or out of memory)"
Any ideas on what the problem might be?
All the best,
Rui Neiva
P.S.: I've also posted this question on the Matrix help forum, but since I
do not know how active that forum is I've decided to see if anyone in the
mailing list would be able to help.
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