** Chapter 14.4 ** for W.H. Greene, Econometric Analysis 6th ed. *****************
* (c) Noel Roy 2003, 2008
*
*                                 14.4 NONPARAMETRIC ESTIMATION
*
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*
* Example 14.8 (p. 418) A Nonparametric Average Cost Function
*
READ (TableF4-3.prn)  id year Cost Output
* 
* While it is stated in the text (p. 410) that data from firms 6-123 in the
* data set are used in the example, we cannot replicate the results unless
* firms 6-140 are used, AFTER the data have been sorted in output order.
sort Output Cost
sample 6 140
*
* Get series for Average Cost.
GENR AC=Cost/Output
*
* Smooth the effect of output on average cost using kernel extimation.
* In general, the format for regression smoothing is:
*    NONPAR depvar indeps / options
* See chapter 23 of the SHAZAM Manual for further information. 
NONPAR AC Output /predict=achat
* Replicate Figure 14.6.
graph ac achat Output
* The default bandwith for the NONPAR command is (4/(3N))**(1/5),
* which is a little higher than what the Example in the textbook uses.
* Replicate Figure 14.7 by using a smaller bandwidth using the SMOOTH=
* option.
NONPAR AC Output /predict=achat SMOOTH=0.04
* Replicate Figure 14.7.
graph  achat Output /lineonly
STOP
*
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* Updated October 27, 2008