/*
** Lesson 6.5: Minimizing Sum-of-Squares Function
** Estimating a CES Production Function
** See Judge, et. al. [1988], Chapter 12
*/
use gpe2;
output file=gpe\output6.5 reset;
load x[30,3]=gpe\judge.txt;

call reset;
_nlopt=0;
_method=5;
_iter=100;
_tol=1.0e-5;
_vcov=1;

_b={1.0,0.5,0.5};
call estimate(&cdsse,x);

_b={1.0,0.5,-1.0,-1.0};
call estimate(&cessse,x);

end;

/* Objective Function */
proc cdsse(data,b); @ CD: sum-of-squares function @
    local l,k,q,e;
    l=data[.,1];
    k=data[.,2];
    q=data[.,3];
    e=ln(q)-b[1]-b[2]*ln(l)-b[3]*ln(k);
    retp(sumc(e^2));
endp;

proc cessse(data,b); @ CES: sum-of-squares function @
    local l,k,q,e;
    l=data[.,1];
    k=data[.,2];
    q=data[.,3];
    e=ln(q)-b[1]-b[4]*ln(b[2]*l^b[3]+(1-b[2])*k^b[3]);
    retp(sumc(e^2));
endp;