Table 5: OLS, fixed effect, and IV estimates (production cost).

Model 1Model 2Model 3Model 4Model 5

Sub0.0021 (0.07)0.1767 (5.10)0.2646 (6.12)0.1109 (3.54)0.1330 (2.87)
VAT−0.0608 (−3.95)−0.1613 (−10.97)−0.2242 (9.33)−0.1180 (−5.35)−0.2128 (−6.06)
Change stock6.4021 (4.79)11.3880 (7.30)34.4833 (6.39)15.3477 (3.62)36.9840 (8.90)
Inccap1.0243 (39.80)0.5390 (7.94)0.5968 (6.96)0.3306 (4.80)1.1341 (8.90)
T rate0.1328 (2.02)0.1807 (2.87)0.2121 (2.89)0.0793 (1.60)0.1933 (2.98)
Lerner−0.3885 (−5.08)−0.0367 (−0.47)0.3812 (2.78)0.1578 (1.63)0.3097 (1.86)
Time trend0.0151 (8.70)0.0177 (7.89)0.0069 (3.72)0.0049 (1.61)
AR (1)0.5343 (13.16)
Constant−1.9137 (−3.95)−13.8627 (2.68)−1.1824 (−1.19)−18.7148 (−2.15)−5.9174 (−4.17)

R square0.95390.96200.94790.97300.9153

Hansen J statistics ( value)0.04610.3190

LLC ( value)0.0270.0040.0000.0000.001
IPS ( value)0.0220.0010.0000.0000.000

AR (1) test ( value)0.0000.0000.0000.565

Durbin Watson (original)0.949
Durbin Watson (transformed)2.201

MethodOLSOLSIVIVIV/Prais-Winsten
Fixed regional effectNoYesYesYesYes

All variables are in natural logarithm form. values are presented within brackets. Instruments used: unemployment and demographic variables. Dependent variable: total construction cost excl. VAT.