MEASUREMENT UNIT INVARIANT COEFFICIENTS IN MULTIPLICATIVE-LOGARITHMICFUNCTIONS

It has been demonstrated that the coefficients of the non-multiplicati ve terms of a multiplicative-logarithmic function are dependent on the units used. In addition, Dickey-Fuller tests on the multiplicative te rms are unit sensitive. It is demonstrated that a simple transformatio n circumvents these problems. It is still true that individual coeffic ients of logarithmic variables in such functions are meaningless and t hat the Dickey-Fuller test is disturbingly arbitary. However, the tran sformation appears to increase the meaningfulness of a technical chang e trend in a translog cost function.