In this discussion, I show how Basu (1997) model can be conducted in STATA program.

Please, start with file number 1.

Then go to file number 2 ((do file)).

In the attachments, I include the data used in applying this model.

In addition, I include appendices to make sure that you get the same results when you try to run Basu (1998) model using the current data.

I hope you will benefit from this discussion

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