Correcting For Biases When Estimating Production Functions: An Illusion Of The Laws Of Algebra?
Abstractthis paper argues that the true cause of the endogeneity bias that allegedly appears when estimating production functions, and which the literature has tried to deal with since the 1940s, is s imply the result of omitted-variable bias due to an incorrect approximation to an accounting identity. As a result we question recent attempts to solve the problem by developing new estimators.
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Bibliographic InfoPaper provided by Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University in its series CAMA Working Papers with number 2004-13.
Length: 23 pages
Date of creation: Nov 2004
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Other versions of this item:
- Jesus Felipe & Rana Hasan & J. S. L. McCombie, 2008. "Correcting for biases when estimating production functions: an illusion of the laws of algebra?," Cambridge Journal of Economics, Oxford University Press, vol. 32(3), pages 441-459, May.
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