When we estimate an AIDS model in levels, the sum of shares is equal to '1' and adding-up restriction on intercept is '1'. However, if use the model in first difference, the sum of shares in first difference is '0'. In this case, the adding-up restriction on intercept should be '1' or '0'.
Norbert Schanne
if you estimate in differences, you eliminate the intercepts - they are not identified, and any restriction on them is redundant. By the way, I do not understand why the restriction on the shares changes when you estimate the model in differences; to my understanding, the parameters should be the same.
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François Gardes
The restriction must be the zero sum: constant in FD signals trends, these trends (one for each equation) must sum to zero.
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