Advanced Search
MyIDEAS: Login to save this paper or follow this series

Estimating complex production functions: The importance of starting values

Contents:

Author Info

  • Mark Neal

    ()
    (Risk and Sustainable Management Group, University of Queensland)

Abstract

Production functions that take into account uncertainty can be empirically estimated by taking a state contingent view of the world. Where there is no a priori information to allocate data amongst a small number of states, the estimation may be carried out with finite mixtures model. The complexity of the estimation almost guarantees a large number of local maxima for the likelihood function. However, it is shown, with examples, that a variation on the traditional method of finding starting values substantially improves the estimation results. One of the major benefits of the proposed method is the reliable estimation of a decision makerâs ability to substitute output between states, justifying a preference for the state contingent approach over the use of a stochastic production function.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.uq.edu.au/rsmg/WP/WPR07_1.pdf
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (David Adamson)
Download Restriction: no

Bibliographic Info

Paper provided by Risk and Sustainable Management Group, University of Queensland in its series Risk & Uncertainty Working Papers with number WP1R07.

as in new window
Length:
Date of creation: Feb 2007
Date of revision:
Handle: RePEc:rsm:riskun:r07_1

Contact details of provider:
Postal: Colin Clark Building, no 39, St. Lucia, Qld. 4072
Phone: +61 7 3365 6601
Fax: +61 7 3365 6601
Email:
Web page: http://www.uq.edu.au/rsmg/index.htm
More information through EDIRC

Related research

Keywords: Production function; econometrics; starting values; state contingent production;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:rsm:riskun:r07_1. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (David Adamson).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.