IDEAS home Printed from https://ideas.repec.org/a/aen/journl/1984v05-04-a03.html
   My bibliography  Save this article

A Comparison of Multivariate Logit and Translog Models for Energy and Nonenergy Input Cost Share Analysis

Author

Listed:
  • Thomas J. Lutton
  • Michael R. LeBlanc

Abstract

With the advent of the translogarithmic (translog) cost function has come greater interest in estimating systems of input share equations (Christensen and Greene, 1976; Berndt and Wood, 1975). A distinguishing feature of the translog cost function is that optimal input shares are linear in parameters. The linearity arises from the second-order approximation and facilitates estimation of the share system. Linearity, however may result in negative fitted shares if error terms are assumed to be additive and normally distributed. Woodland (1979) demonstrated that maximum likelihood estimators with an underlying Dirichlet distribution constrain fitted shares to be inside the zero-one interval for the sample. However, it is possible to obtain shares outside the zero-one interval when the model is used for forecasting. Moreover, there is no theoretical reason why input shares should be monotonic in input prices. If a third-order Taylor series expansion is assumed, the monotonicity restriction can be relaxed, but such an assumption sacrifices the principle of parametric parsimony (Fuss et al., 1978).

Suggested Citation

  • Thomas J. Lutton & Michael R. LeBlanc, 1984. "A Comparison of Multivariate Logit and Translog Models for Energy and Nonenergy Input Cost Share Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 35-44.
  • Handle: RePEc:aen:journl:1984v05-04-a03
    as

    Download full text from publisher

    File URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=1665
    Download Restriction: Access to full text is restricted to IAEE members and subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Claassen, Roger & Langpap, Christian & Wu, JunJie, 2015. "Impacts of Federal Crop Insurance on Land Use and Environmental Quality," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205340, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    2. Dahl, Carol & Ko, James, 1998. "The effect of deregulation on US fossil fuel substitution in the generation of electricity," Energy Policy, Elsevier, vol. 26(13), pages 981-988, November.
    3. Langpap, Christian & Wu, JunJie, 2014. "Impacts of Changes in Federal Crop Insurance Programs on Land Use and Environmental Quality," 2014 AAEA: Crop Insurance and the 2014 Farm Bill Symposium: Implementing Change in U.S. Agricultural Policy, October 8-9, Louisville, KY 186643, Agricultural and Applied Economics Association.

    More about this item

    JEL classification:

    • F0 - International Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aen:journl:1984v05-04-a03. 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 Williams). General contact details of provider: http://edirc.repec.org/data/iaeeeea.html .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.