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Nonparametric Dynamic Production Analysis and the Theory of Cost

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  • Elvira Silva
  • Spiro Stefanou

Abstract

While the dynamic theory of production provides little insight towards identifying a specific functional form for the firm's technology, dynamic production analysis has been explored traditionally in a parametric framework. A nonparametric dynamic dual cost approach to production analysis is developed in this article. Recovering technological information from intertemporal cost minimizing behavior is possible without imposing a parametric functional form on the firm's technology. Nonparametric tests to analyze the structure of a dynamic technology are presented from a dynamic cost minimizing perspective. The empirical implementation of these tests is illustrated for a balanced panel data set of Pennsylvania dairy operators during the time period 1986–1992. Copyright Kluwer Academic Publishers 2003

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  • Elvira Silva & Spiro Stefanou, 2003. "Nonparametric Dynamic Production Analysis and the Theory of Cost," Journal of Productivity Analysis, Springer, vol. 19(1), pages 5-32, January.
    • Handle: RePEc:kap:jproda:v:19:y:2003:i:1:p:5-32
    DOI: 10.1023/A:1021865018717
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