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An empirical input allocation model for the multiproduct firm

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  • Seale, James L.
  • Vorotnikova, Ekaterina
  • Asci, Serhat

Abstract

Laitinen (1980) derives an input allocation model for a multiproduct firm that first maximizes revenue and second maximizes profit. While theoretically elegant, the model has never been formulated empirically because of the complexity of the model’s price-deflated terms. This paper derives the linear parameterization of the input allocation model that can be used for empirical estimation.

Suggested Citation

  • Seale, James L. & Vorotnikova, Ekaterina & Asci, Serhat, 2014. "An empirical input allocation model for the multiproduct firm," Economics Letters, Elsevier, vol. 124(3), pages 367-369.
    • Handle: RePEc:eee:ecolet:v:124:y:2014:i:3:p:367-369
    DOI: 10.1016/j.econlet.2014.06.021
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    References listed on IDEAS

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    1. Theil, Henri, 1977. "The Independent Inputs of Production," Econometrica, Econometric Society, vol. 45(6), pages 1303-1327, September.
    2. Andrew C. Harvey, 1990. "The Econometric Analysis of Time Series, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 026208189x, April.
    3. BARTEN, Anton P., 1977. "The systems of consumer demand functions approach: A review," LIDAM Reprints CORE 284, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Nicola Rossi, 1984. "The Estimation of Product Supply and Input Demand by the Differential Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 368-375.
    5. Clements, Kenneth W., 1980. "An aggregative multiproduct supply model," European Economic Review, Elsevier, vol. 13(2), pages 239-245, March.
    6. Barten, Anton P, 1977. "The Systems of Consumer Demand Functions Approach: A Review," Econometrica, Econometric Society, vol. 45(1), pages 23-51, January.
    7. Barten, Anton P, 1993. "Consumer Allocation Models: Choice of Functional Form," Empirical Economics, Springer, vol. 18(1), pages 129-158.
    8. Laitinen, Kenneth & Theil, Henri, 1978. "Supply and demand of the multiproduct firm," European Economic Review, Elsevier, vol. 11(2), pages 107-154, August.
    9. Livanis, Grigorios & Moss, Charles B., 2006. "Quasi-fixity and multiproduct firms," Economics Letters, Elsevier, vol. 93(2), pages 228-234, November.
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    Cited by:

    1. Zhu, Manhong & Seale, James L. Jr & VanSickle, John, 2015. "China’s soybean import allocation analysis by country-of-origin," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196797, Southern Agricultural Economics Association.
    2. Zhu, Manhong & Onel, Gulcan & Seale, James L., 2015. "An empirical input allocation model for the cost minimizing multiproduct firm," Economics Letters, Elsevier, vol. 132(C), pages 73-76.
    3. Ekaterina Vorotnikova & Serhat Asci & James L. Seale, 2018. "Joint production, land allocation, and the effects of the production flexibility program," Empirical Economics, Springer, vol. 55(3), pages 1121-1143, November.
    4. Arancibia, Rodrigo García & Guiguet, Edith Depetris & Rossini, Gustavo & Coronel, Mariano, 2016. "Land Allocation Among The Main Crops In Argentina: Estimation Of Price And Land Elasticities," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(3), pages 1-13, July.

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    More about this item

    Keywords

    Multiproduct firm; Input allocation; Differential joint production;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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