Monte-Carlo experimentation is a well-known approach to test the performance of alternative methodologies under different hypothesis. In the frontier analysis framework, whatever parametric or non-parametric methods tested, most experiments have been developed up to now assuming single output multi-input production functions and data generated using a Cobb- Douglas technology. The aim of this paper is to show how reliable multi-output multi-input production data can be generated using a parametric output distance function approach. A flexible translog technology is used for this purpose that satisfies regularity conditions. Two meaningful outcomes of this analysis are the identification of a valid range of parameters values satisfying monotonicity and curvature restrictions and of a rule of thumb to be applied in empirical studies.
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Paper provided by Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège in its series CREPP Working Papers with number
0507.
Find related papers by JEL classification: C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Statistical Simulation Methods C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models
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