Estimating random effects production function models with selectivity bias: an application to Swedish crop producers
In this paper, the estimation of production functions and measurement of the rate of technical change is performed when selectivity bias is expected, A sample selection model consisting of a selection and a regression equation is estimated using Heckman's two-stage method. It is discussed in the context of a production function where the underlying technology is represented by a translog functional form. For the regression, a random effects model with heteroscedastic variances is assumed. This model and an alternative conventional model retaining heteroscedasticity without considering selectivity bias are estimated using the Generalized Least Squares method. The data used are a large rotating panel data set from Swedish crop producers over the period 1976-1988. The empirical results from the comparison between these two models show that the introduction of heteroscedasticity and the integration of sample selection in the production relationship is important. The impact of a correction for selectivity bias on the results, in terms of input elasticities and returns to scale is found to be significant.
(This abstract was borrowed from another version of this item.)
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- Little, Roderick J A, 1985. "A Note about Models for Selectivity Bias," Econometrica, Econometric Society, vol. 53(6), pages 1469-74, November.
- Olsen, Randall J, 1982. "Distributional Tests for Selectivity Bias and a More Robust Likelihood Estimator," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 23(1), pages 223-40, February.
- G. S. Maddala, 1987. "Limited Dependent Variable Models Using Panel Data," Journal of Human Resources, University of Wisconsin Press, vol. 22(3), pages 307-338.
- White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
- Baltagi, Badi H & Griffin, James M, 1988. "A Generalized Error Component Model with Heteroscedastic Disturbances," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 29(4), pages 745-53, November.
- Baltagi, Badi H & Raj, Baldev, 1992. "A Survey of Recent Theoretical Developments in the Econometrics of Panel Data," Empirical Economics, Springer, vol. 17(1), pages 85-109.
- Nijman, Theo & Verbeek, Marno & van Soest, Arthur, 1991.
"The efficiency of rotating-panel designs in an analysis-of-variance model,"
Journal of Econometrics,
Elsevier, vol. 49(3), pages 373-399, September.
- Nijman, T.E. & Verbeek, M.J.C.M. & van Soest, A.H.O., 1991. "The efficiency of rotating panel designs in an analysis of variance model," Other publications TiSEM 9cbb61cc-762f-4ab2-84f6-5, Tilburg University, School of Economics and Management.
- Verbeek, Marno, 1990. "On the estimation of a fixed effects model with selectivity bias," Economics Letters, Elsevier, vol. 34(3), pages 267-270, November.
- Heckman, James, 2013.
"Sample selection bias as a specification error,"
Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Biorn, Erik & Jansen, Eilev S, 1983. " Individual Effects in a System of Demand Functions," Scandinavian Journal of Economics, Wiley Blackwell, vol. 85(4), pages 461-83.
- Zabel, Jeffrey E., 1992. "Estimating fixed and random effects models with selectivity," Economics Letters, Elsevier, vol. 40(3), pages 269-272, November.
- Greene, William H, 1981. "Sample Selection Bias as a Specification Error: Comment," Econometrica, Econometric Society, vol. 49(3), pages 795-98, May.
- Biorn, Erik, 1981. "Estimating economic relations from incomplete cross-section/time-series data," Journal of Econometrics, Elsevier, vol. 16(2), pages 221-236, June.
- Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
When requesting a correction, please mention this item's handle: RePEc:eee:agecon:v:11:y:1994:i:2-3:p:171-189. 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: (Zhang, Lei)
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.