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Specification and Estimation of Nonseparable Two-Stage Technologies: The Leontief CES and the Cobb-Douglas CES

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  • Pollak, Robert A
  • Wales, Terence J

Abstract

A two-stage technology is a sequential production process that first uses pri mary inputs to produce intermediate inputs and then uses theintermediate inputs to produce final output. In this paper the authors show that two-stage technologies provide a general procedure for combining production functions or cost functions to obtain new specifications suitable for empirical production analysis. They investigate two new cost functions for which the input demand systemssatisfy global regularity conditions in a wide range of nondegenerate cases. Using six data sets, the authors estimate thesetwo input demand systems, both with and without imposing global regularity conditions, and find that one of them performs well. Copyright 1987 by University of Chicago Press.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 95 (1987)
Issue (Month): 2 (April)
Pages: 311-33

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Handle: RePEc:ucp:jpolec:v:95:y:1987:i:2:p:311-33

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Web page: http://www.journals.uchicago.edu/JPE/

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Cited by:
  1. Mekhora, Thamrong, 1999. "Econometric analysis on economies of scale: An application to rice and shrimp production in Thailand," 1999 Conference (43th), January 20-22, 1999, Christchurch, New Zealand 124086, Australian Agricultural and Resource Economics Society.
  2. Boeters, Stefan & Savard, Luc, 2013. "The Labor Market in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, Elsevier.
  3. Stefan Boeters & Michael Feil, 2009. "Heterogeneous Labour Markets in a Microsimulation–AGE Model: Application to Welfare Reform in Germany," Computational Economics, Society for Computational Economics, vol. 33(4), pages 305-335, May.
  4. James Kirkley & Catherine Morrison Paul & Stephen Cunningham & Joseph Catanzano, 2004. "Embodied and Disembodied Technical Change in Fisheries: An Analysis of the Sète Trawl Fishery, 1985–1999," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 29(2), pages 191-217, October.
  5. Rendleman, C. Matthew, 1993. "Estimation of Aggregate U.S. Demands for Fertilizer, Pesticides, and Other Inputs: A Model for Policy Analysis," Technical Bulletins 157035, United States Department of Agriculture, Economic Research Service.

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