The Treasury

Global Navigation

Personal tools

Treasury
Publication

Capital Shallowness: A Problem for New Zealand? - WP 05/05

Appendix 1

Appendix Table 1: Results using relative prices unadjusted for sole-proprietors income, with the sample period from 1978-2002
Dependent variable: ln (K/L) Australia New Zealand
Coefficient Estimate t-ratio Coefficient Estimate t-ratio
Log of relative prices (β1) 0.18*** 3.59 0.15** 2.57
Time Trend (β2) 0.005** 2.26 0.005*** 3.64
Log of lagged capital-labour ratio (β3) 0.62*** 4.34 0.64*** 5.02
Long-run elasticity of substitution 0.47*** -14.75a 0.42*** -14.58a
Adjusted R-squared 0.98 0.90
Breusch-Godfrey (order 1) 3.16* 6.18**

a: These t-ratios were calculated using the Delta method and indicate whether the long-run elasticities are statistically different from one.

Page top