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An empirical input allocation model for the cost minimizing multiproduct firm

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  • Zhu, Manhong
  • Onel, Gulcan
  • Seale, James L.

Abstract

Laitinen and Theil (1978) derive a theoretical input allocation model for a multiproduct firm that first minimizes cost and second maximizes profit. However, its empirical counterpart is not available. We linearize the model and derive a general empirically estimable model.

Suggested Citation

  • Zhu, Manhong & Onel, Gulcan & Seale, James L., 2015. "An empirical input allocation model for the cost minimizing multiproduct firm," Economics Letters, Elsevier, vol. 132(C), pages 73-76.
    • Handle: RePEc:eee:ecolet:v:132:y:2015:i:c:p:73-76
    DOI: 10.1016/j.econlet.2015.04.015
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    References listed on IDEAS

    as
    1. Theil, Henri, 1977. "The Independent Inputs of Production," Econometrica, Econometric Society, vol. 45(6), pages 1303-1327, September.
    2. BARTEN, Anton P., 1969. "Maximum likelihood estimation of a complete system of demand equations," LIDAM Reprints CORE 34, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Barten, A. P., 1969. "Maximum likelihood estimation of a complete system of demand equations," European Economic Review, Elsevier, vol. 1(1), pages 7-73.
    4. Clements, Kenneth W. & Theil, Henri, 1978. "A simple method of estimating price elasticities in international trade," Economics Letters, Elsevier, vol. 1(2), pages 133-137.
    5. Seale, James L. & Vorotnikova, Ekaterina & Asci, Serhat, 2014. "An empirical input allocation model for the multiproduct firm," Economics Letters, Elsevier, vol. 124(3), pages 367-369.
    6. Laitinen, Kenneth & Theil, Henri, 1978. "Supply and demand of the multiproduct firm," European Economic Review, Elsevier, vol. 11(2), pages 107-154, August.
    7. Livanis, Grigorios & Moss, Charles B., 2006. "Quasi-fixity and multiproduct firms," Economics Letters, Elsevier, vol. 93(2), pages 228-234, November.
    8. Nicola Rossi, 1984. "The Estimation of Product Supply and Input Demand by the Differential Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 368-375.
    9. Theil, Henri, 1975. "The theory of rational random behavior and its application to demand analysis," European Economic Review, Elsevier, vol. 6(3), pages 217-226, July.
    10. Theil, Henri & Clements, Kenneth W., 1978. "A differential approach to U.S. import demand," Economics Letters, Elsevier, vol. 1(3), pages 249-252.
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    Cited by:

    1. James L. Seale Jr., & Gulcan Onel & Manhong Zhu, 2016. "A New Empirical Output Allocation Model for the Competitive Multiproduct Firm," Economic Papers, The Economic Society of Australia, vol. 35(4), pages 403-410, December.

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    More about this item

    Keywords

    Multiproduct firm; Cost minimization; Input allocation; Joint production; Input–output separability;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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