CPANEL Procedure

Note: Input data must be in a CAS table that is accessible in your CAS session. You must refer to this table by using a two-level name. The first level must be a CAS engine libref, and the second level must be the table name. For more information, see the sections Using CAS Sessions and CAS Engine Librefs and Loading a SAS Data Set onto a CAS Server in Chapter 4, Shared Concepts.

The following DATA step creates the data table Electricity from the cost function data in Greene (1990). This DATA step assumes that your libref is named mylib, but you can substitute any appropriately defined libref. The variable Production is the log of output in millions of kilowatt-hours, and the variable Cost is the log of cost in millions of dollars.

data mylib.Electricity;
   input firm year production cost @@;
datalines;
1 1955   5.36598   1.14867  1 1960   6.03787   1.45185
1 1965   6.37673   1.52257  1 1970   6.93245   1.76627
2 1955   6.54535   1.35041  2 1960   6.69827   1.71109
2 1965   7.40245   2.09519  2 1970   7.82644   2.39480
3 1955   8.07153   2.94628  3 1960   8.47679   3.25967
3 1965   8.66923   3.47952  3 1970   9.13508   3.71795
4 1955   8.64259   3.56187  4 1960   8.93748   3.93400
4 1965   9.23073   4.11161  4 1970   9.52530   4.35523
5 1955   8.69951   3.50116  5 1960   9.01457   3.68998
5 1965   9.04594   3.76410  5 1970   9.21074   4.05573
6 1955   9.37552   4.29114  6 1960   9.65188   4.59356
6 1965  10.21163   4.93361  6 1970  10.34039   5.25520
;

Consider the model

where represents cost, represents production, is the cross-sectional error component, and is the error variance component.

If you assume that the cross-sectional effects are random, five possible estimators are available for the variance components. The VCOMP=FB option in the following statements uses the Fuller and Battese (1974) estimator to fit the model:

proc cpanel data = mylib.Electricity;
   id firm year;
   model cost = production / ranone vcomp = fb;
run;

The output of these statements is shown in Figure 1.

Printed first is a report that provides the estimation method and various data counts. Fit statistics and variance components estimates are printed next. A Hausman specification test compares this model to its fixed-effects counterpart. Finally, the table of regression parameter estimates shows the estimates, standard errors, and t tests.