Download or read book A Robust Approach to Estimating Production Functions written by Kyoo il Kim and published by . This book was released on 2018 with total page 17 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study Ackerberg, Caves, and Frazer (2015)'s production function estimation method using Monte Carlos simulations. First, we replicate their results by using the same procedure and confirm the existence, as noted by ACF, of a spurious minimum in the estimation. In the population, or when the sample size is large enough, this "global" identification problem may not be a concern because the spurious minimum holds only at the extreme values of the capital and the labor coefficients. However, in the finite samples, their estimator can produce estimates that may not be clearly regarded as the spurious ones. In our second experiment, we modify the ACF procedure and show that using additional lagged instruments or a sequential search help to obtain robust estimates. We also provide some arguments why such modifications help in the ACF setting.

Download or read book Production Function Estimation Robust to Flexible Timing of Labor Input written by Kyoo il Kim and published by . This book was released on 2019 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: Control function approaches to estimating production functions rely on a proxy that is monotone in an unobserved scalar productivity conditioning on other state variables. Ackerberg, Caves, and Frazer (2015) point out a potential functional dependence problem when conditioning only on capital. They provide a simple solution by conditioning on both capital and labor. This approach allows flexible timing of labor input for when firms learn all or part of their productivity. However, we demonstrate that ACF's moment condition may suffer from weak identification, and its significance depends on the timing of labor input. We then propose easy-to-implement modified procedures that remedy these issues, and provide Monte Carlo evidence. Estimation of production functions with flexible timing assumption of inputs is important because it can allow for unobserved, serially correlated, firm-specific wage shocks, labor being chosen prior to other variable inputs, or labor having dynamic implications. Moreover, since the exact timing of input choices is unknown and even may differ across firms in practice, our proposal is valuable as it fully incorporates the flexible framework but avoids weak identification.

Download or read book Estimating Production Functions with Robustness Against Errors in the Proxy Variables written by Yingyao Hu and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper proposes a new approach to the identification and estimation of production functions. It extends the literature on the structural estimation of production functions, which dates back to the seminal work of Olley and Pakes (1996), by relaxing the scalar-unobservable assumption about the proxy variables. The key additional assumption needed in the identification argument is the existence of two conditionally independent proxy variables (e.g. the investment and the material input). The proposed generalized method of moment (GMM) estimator is flexible and straightforward to apply. The method is applied to study how rapidly firms in the Chilean food-product industry adjust their inputs in response to shocks to their productivity.

Download or read book Estimating Poland s Potential Output written by Mr.Natan P. Epstein and published by International Monetary Fund. This book was released on 2010-01-01 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper develops a methodology based on the production-function approach to estimate potential output of the Polish economy. The paper concentrates on obtaining a robust estimate of the labor input by deriving Poland's natural rate of unemployment. The estimated unemployment gap is found to track well pressures on resource constraints. Moreover, the overall results show that, prior to the recent global financial crisis, Poland's output and employment were both growing above potential. The production function is also used to derive medium-term projections of the output gap. According to our methodology, in the aftermath of the global crisis, Poland is not expected to experience a sizable and persistent negative output gap.

Download or read book Essays on Production Function Estimation written by Mert Demirer and published by . This book was released on 2020 with total page 201 pages. Available in PDF, EPUB and Kindle. Book excerpt: This first chapter develops a new method for estimating production functions with factor-augmenting technology and assesses its economic implications. The method does not impose parametric restrictions and generalizes prior approaches that rely on the CES production function. I first extend the canonical Olley-Pakes framework to accommodate factor-augmenting technology. Then, I show how to identify output elasticities based on a novel control variable approach and the optimality of input expenditures. I use this method to estimate output elasticities and markups in manufacturing industries in the US and four developing countries. Neglecting labor-augmenting productivity and imposing parametric restrictions mismeasures output elasticities and heterogeneity in the production function. My estimates suggest that standard models (i) underestimate capital elasticity by up to 70 percent (ii) overestimate labor elasticity by up to 80 percent. These biases propagate into markup estimates inferred from output elasticities: markups are overestimated by 20 percentage points. Finally, heterogeneity in output elasticities also affects estimated trends in markups: my estimates point to a much more muted markup growth (about half) in the US manufacturing sector than recent estimates. The second chapter develops partial identification results that are robust to deviations from the commonly used control function approach assumptions and measurement errors in inputs. In particular, the model (i) allows for multi-dimensional unobserved heterogeneity,(ii) relaxes strict monotonicity to weak monotonicity, (iii) accommodates a more flexible timing assumption for capital. I show that under these assumptions production function parameters are partially identified by an 'imperfect proxy' variable via moment inequalities. Using these moment inequalities, I derive bounds on the parameters and propose an estimator. An empirical application is presented to quantify the informativeness of the identified set. The third chapter develops an approach in which endogenous networks is a source of identification in estimations with network data. In particular, I study a linear model where network data can be used to control for unobserved heterogeneity and partially identify the parameters of the linear model. My method does not rely on a parametric model of network formation. Instead, identification is achieved by assuming that the network satisfies latent homophily - the tendency of individuals to be linked with others who are similar to themselves. I first provide two definitions of homophily: weak and strong homophily. Then, based on these definitions, I characterize the identified sets and show that they are bounded under weak conditions. Finally, to illustrate the method in an empirical setting, I estimate the effects of education on risk preferences and peer effects using social network data from 150 Chinese villages.

Download or read book Estimating Production Functions in Differentiated Product Industries with Quantity Information and External Instruments written by Nicolás de Roux and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops a new method for estimating production-function parameters that can be applied in differentiated-product industries with endogenous quality and variety choice. We take advantage of data on physical quantities of outputs and inputs from the Colombian manufacturing survey, focusing on producers of rubber and plastic products. Assuming constant elasticities of substitution of outputs and inputs within firms, we aggregate from the firm-product to the firm level and show how quality and variety choices may bias standard estimators. Using real exchange rates and variation in the "bite" of the national minimum wage, we construct external instruments for materials and labor choices. We implement a simple two-step instrumental-variables method, first estimating a difference equation to recover the materials and labor coefficients and then estimating a levels equation to recover the capital coefficient. Under the assumption that the instruments are uncorrelated with firms' quality and variety choices, this method yields consistent estimates, free of the quality and variety biases we have identified. Our point estimates differ from those of existing methods and changes in our preferred productivity estimator perform relatively well in predicting future export growth.

Download or read book Essays in Honor of Subal Kumbhakar written by Christopher F. Parmeter and published by Emerald Group Publishing. This book was released on 2024-04-05 with total page 401 pages. Available in PDF, EPUB and Kindle. Book excerpt: It is the editor’s distinct privilege to gather this collection of papers that honors Subhal Kumbhakar’s many accomplishments, drawing further attention to the various areas of scholarship that he has touched.

Download or read book Handbook of Industrial Organization written by and published by Elsevier. This book was released on 2021-12-09 with total page 788 pages. Available in PDF, EPUB and Kindle. Book excerpt: Handbook of Industrial Organization, Volume Four highlights new advances in the field, with this new volume presenting interesting chapters written by an international board of expert authors. Presents authoritative surveys and reviews of advances in theory and econometrics Reviews recent research on capital raising methods and institutions Includes discussions on developing countries

Download or read book A Programming Approach to Estimate Production Functions Using Bounds on the True Production Set written by and published by . This book was released on 1997 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Specification and Estimation of Multiple Output Production Functions written by G. Hasenkamp and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 163 pages. Available in PDF, EPUB and Kindle. Book excerpt: This monograph is intended as a contribution to applied work in production theory by treating: a) The measurement problems involved whenever several outputs are jointly produced, and b) The (possible) econometric framework for estimating production function parameters whenever (relative) prices vary sufficiently over the observations. Thus, the "pure" theory of production, and the theory of non-linear regression is not treated in sufficient detail: for these topics we refer to the available literature~ for a comprehensive list of references we refer to Uebe (1975). Some years ago, papers by L. J. Lau and W. E. Diewert initiated my interest in duality within production theory, and then I started to appreciate R. W. Shephard's fundamental contribution to this topic. This monograph is a (minor) revision of a Ph. D. dissertation submitted to the Department of Economics, The University of Wisconsin, Madison, in August 1973. The Graduate School and the Social Systems Research Institute provided funds for the reported computer work, Lawrence R. Klein and Laurits R. Christensen provided data, and as a Graduate Student I received financial support in form of an University Fellowship~ all this is very much appreciated. With some nostalgia I think back to the enjoyable period of learning during the preparation of my diFosertation~ I appreciate the spirit within the department, and the guidance of my committee Arthur S. Goldberger, Dennis J. Aigner, and Laurits R. Christensen.

Download or read book Production Function Estimation with Measurement Error in Inputs written by Allan Collard-Wexler and published by . This book was released on 2016 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: Production functions are a central component in a variety of economic analyzes. However, these production functions often first need to be estimated using data on individual production units. There is reason to believe that, more than any other input in the production process, there are severe errors in the recording of capital stock. Thus, when estimating production functions, we need to account for the ubiquity of measurement error in capital stock. This paper shows that commonly used estimation techniques in the productivity literature fail in the presence of plausible amounts of measurement error in capital. We propose an estimator that addresses this measurement error, while controlling for unobserved productivity shocks. Our main insight is that in- vestment expenditures are informative about a producer's capital stock, and we propose a hybrid IV-Control function approach that instruments capital with (lagged) investment, while relying on standard intermediate input demand equations to offset the simultaneity bias. We rely on a series of Monte Carlo simulations and find that standard approaches yield downward-biased capital coefficients, while our estimator does not. We apply our estimator to two standard datasets, the census of manufacturing firms in India and Slovenia, and find capital coefficients that are, on average, twice as large.

Download or read book Production and Cost Functions written by Erkin Bairam and published by Routledge. This book was released on 2018-04-27 with total page 181 pages. Available in PDF, EPUB and Kindle. Book excerpt: This title was first published in 2001. The objective of this book is to discuss specification and applications of new production, cost and profit functions. It is aimed at specialists in production, economic growth, costs, profits and applied econometrics in particular.

Download or read book A Primal dual Estimator of Production and Cost Functions Within an Errors in variables Context written by Quirino Paris and published by . This book was released on 2004 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Handbook of Production Economics written by Subhash C. Ray and published by Springer Nature. This book was released on 2022-06-02 with total page 1797 pages. Available in PDF, EPUB and Kindle. Book excerpt: This three-volume handbook includes state-of-the-art surveys in different areas of neoclassical production economics. Volumes 1 and 2 cover theoretical and methodological issues only. Volume 3 includes surveys of empirical applications in different areas like manufacturing, agriculture, banking, energy and environment, and so forth.

Download or read book Cost and Production Functions written by R.W. Shephard and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 116 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study is the result of an interest in the economic theory of production intermittently pursued during the past three years. Over this period I have received substantial support from the Office of Naval Research, first from a personal service consulting contract directly with the Mathematics Division of the Office of Naval Research and secondly from Project N6 onr-27009 at Princeton Univer sity under the direction of Professor Oskar Morgenstern. Grateful acknowledgement is made to the ·Office of Naval Research for this support and to Professor Morgenstern, in particular, for his interest in the puolication of this research. The responsibility for errors and omissions, how ever, rests entirely upon the author. Professor G. C. Evans has given in terms of a simple total cost function, depending solely upon output rate, a treatment of certain aspects of the economic theory of production which has inherent generality and convenience of formulation. The classical approach of expressing the technology of production by means of a production function is potentially less restrictive than the use of a simple total cost function, but it has not been applied in a more general form other than to derive the familiar conditions between marginal productivities of the factors of produc tion and their market prices.

Download or read book Handbook on Public Sector Efficiency written by António Afonso and published by Edward Elgar Publishing. This book was released on 2023-03-02 with total page 459 pages. Available in PDF, EPUB and Kindle. Book excerpt: Examining the increasingly relevant topic of public sector efficiency, this dynamic Handbook investigates the context of constrained fiscal space and public funding sources using cross-country datasets in areas including China, India and sub-Saharan Africa and OECD economies.

Download or read book An Introduction to Cost and Production Functions written by David F. Heathfield and published by . This book was released on 1987 with total page 218 pages. Available in PDF, EPUB and Kindle. Book excerpt: