Coppejans, Mark - In: The Review of Economics and Statistics 85 (2003) 3, pp. 680-692
We consider expectations of the form E[logy|x] = Σ<sub>j=1</sub>-super-d α<sub>j</sub> log x<sub>j</sub> as a good starting point for a more general analysis. We show why this naturally leads to the following flexible functional form: E[y|x] = f(Σ<sub>j=1</sub>-super-dh<sub>j</sub>(x<sub>j</sub>)), where f(ċ) and the h<sub>j</sub>(ċ)'s are estimated by cubic splines....