Parametric Aggregation of Random Coefficient Cobb-Douglas Production Functions: Evidence from Manufacturing Industries
AbstractA panel data study of parametric aggregation of a production function is presented. A four-factor Cobb-Douglas function with random and jointly normal coefficients and jointly log-normal inputs is used. Since, if the number of micro units is not too small and certain regularity conditions are met, aggregates expressed as arithmetic means can be associated with expectations, we consider conditions ensuring the existence and stability of relationships between expected inputs and expected output and discuss their properties. Existence conditions for and relationships between higher-order moments are considered. An empirical implementation based on panel data for two manufacturing industries gives decomposition and simulation results for expected output and estimates of the aggregate parameters. Illustrations of approximation procedures and aggregation errors are also given.
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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 342.
Date of creation: Feb 2003
Date of revision:
Aggregation. Productivity. Cobb-Douglas. Log-normal distribution. Random coefficients. Panel data.;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-06-04 (All new papers)
- NEP-ECM-2003-06-09 (Econometrics)
- NEP-EFF-2003-07-29 (Efficiency & Productivity)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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