diff --git a/matlab/dsge_var_likelihood.m b/matlab/dsge_var_likelihood.m
index 4e10d0bb2..1348e5d6b 100644
--- a/matlab/dsge_var_likelihood.m
+++ b/matlab/dsge_var_likelihood.m
@@ -248,10 +248,10 @@ if ~isinf(dsge_prior_weight)% Evaluation of the likelihood of the dsge-var model
     PHI_tilde = tmp2*tmp1';                                                   %formula (28), DS (2004)
     clear('tmp1');
     prodlng1 = sum(gammaln(.5*((1+dsge_prior_weight)*NumberOfObservations- ...
-                               NumberOfObservedVariables*NumberOfLags ...
+                               NumberOfParameters ...
                                +1-(1:NumberOfObservedVariables)')));    %last term in numerator of third line of (A.2), DS (2004)
     prodlng2 = sum(gammaln(.5*(dsge_prior_weight*NumberOfObservations- ...
-                               NumberOfObservedVariables*NumberOfLags ...
+                               NumberOfParameters ...
                                +1-(1:NumberOfObservedVariables)')));    %last term in denominator of third line of (A.2), DS (2004)
     %Compute minus log likelihood according to (A.2), DS (2004)
     lik = .5*NumberOfObservedVariables*log(det(dsge_prior_weight*NumberOfObservations*GXX+mXX)) ... %first term in numerator of second line of (A.2), DS (2004)