IDEAS home Printed from https://ideas.repec.org/a/kap/jproda/v19y2003i1p5-32.html
   My bibliography  Save this article

Nonparametric Dynamic Production Analysis and the Theory of Cost

Author

Listed:
  • Elvira Silva
  • Spiro Stefanou

Abstract

While the dynamic theory of production provides little insight towards identifying a specific functional form for the firm's technology, dynamic production analysis has been explored traditionally in a parametric framework. A nonparametric dynamic dual cost approach to production analysis is developed in this article. Recovering technological information from intertemporal cost minimizing behavior is possible without imposing a parametric functional form on the firm's technology. Nonparametric tests to analyze the structure of a dynamic technology are presented from a dynamic cost minimizing perspective. The empirical implementation of these tests is illustrated for a balanced panel data set of Pennsylvania dairy operators during the time period 1986–1992. Copyright Kluwer Academic Publishers 2003

Suggested Citation

  • Elvira Silva & Spiro Stefanou, 2003. "Nonparametric Dynamic Production Analysis and the Theory of Cost," Journal of Productivity Analysis, Springer, vol. 19(1), pages 5-32, January.
    • Handle: RePEc:kap:jproda:v:19:y:2003:i:1:p:5-32
    DOI: 10.1023/A:1021865018717
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1023/A:1021865018717
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1023/A:1021865018717?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Treadway, Arthur B., 1970. "Adjustment costs and variable inputs in the theory of the competitive firm," Journal of Economic Theory, Elsevier, vol. 2(4), pages 329-347, December.
    2. Ullah, Aman, 1988. "Nonparametric Estimation and Hypothesis Testing in Econometric Models," Empirical Economics, Springer, vol. 13(3/4), pages 223-249.
    3. Aman Ullah, 1988. "Non-parametric Estimation of Econometric Functionals," Canadian Journal of Economics, Canadian Economics Association, vol. 21(3), pages 625-658, August.
    4. McLaren, Keith R & Cooper, Russel J, 1980. "Intertemporal Duality: Application to the Theory of the Firm," Econometrica, Econometric Society, vol. 48(7), pages 1755-1762, November.
    5. A. B. Treadway, 1969. "On Rational Entrepreneurial Behaviour and the Demand for Investment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 36(2), pages 227-239.
    6. Dominique Deprins & Léopold Simar & Henry Tulkens, 2006. "Measuring Labor-Efficiency in Post Offices," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 285-309, Springer.
    7. Lim, Hongil & Shumway, C Richard, 1992. "Profit Maximization, Returns to Scale, and Measurement Error," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 430-438, August.
    8. Ramey, Valerie A, 1991. "Nonconvex Costs and the Behavior of Inventories," Journal of Political Economy, University of Chicago Press, vol. 99(2), pages 306-334, April.
    9. Hanoch, Giora & Rothschild, Michael, 1972. "Testing the Assumptions of Production Theory: A Nonparametric Approach," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 256-275, March-Apr.
    10. Ricardo J. Caballero & Eduardo M. R. A. Engel & John C. Haltiwanger, 1995. "Plant-Level Adjustment and Aggregate Investment Dynamics," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(2), pages 1-54.
    11. Charles Blackorby & William Schworm, 1982. "Aggregate Investment and Consistent Intertemporal Technologies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(4), pages 595-614.
    12. Varian, Hal R., 1990. "Goodness-of-fit in optimizing models," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 125-140.
    13. repec:bla:scandj:v:85:y:1983:i:2:p:207-22 is not listed on IDEAS
    14. repec:bla:scandj:v:85:y:1983:i:2:p:191-205 is not listed on IDEAS
    15. Timothy F. Bresnahan & Valerie A. Ramey, 1994. "Output Fluctuations at the Plant Level," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(3), pages 593-624.
    16. Banker, Rajiv D & Maindiratta, Ajay, 1988. "Nonparametric Analysis of Technical and Allocative Efficiencies in Production," Econometrica, Econometric Society, vol. 56(6), pages 1315-1332, November.
    17. Varian, Hal R, 1984. "The Nonparametric Approach to Production Analysis," Econometrica, Econometric Society, vol. 52(3), pages 579-597, May.
    18. Robert E. Lucas & Jr., 1967. "Adjustment Costs and the Theory of Supply," Journal of Political Economy, University of Chicago Press, vol. 75(4), pages 321-321.
    19. Varian, Hal R., 1985. "Non-parametric analysis of optimizing behavior with measurement error," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 445-458.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Silva, Elvira & Lansink, Alfons Oude & Stefanou, Spiro E., 2015. "The adjustment-cost model of the firm: Duality and productive efficiency," International Journal of Production Economics, Elsevier, vol. 168(C), pages 245-256.
    2. Yacob Abrehe Zereyesus & Allen M. Featherstone & Michael R. Langemeier, 2021. "Are Kansas farms profit maximizers? A stochastic additive error approach," Agricultural Economics, International Association of Agricultural Economists, vol. 52(1), pages 37-50, January.
    3. Leleu, Hervé, 2013. "Inner and outer approximations of technology: A shadow profit approach," Omega, Elsevier, vol. 41(5), pages 868-871.
    4. Laurens Cherchye & Timo Kuosmanen & Thierry Post, 2001. "Nonparametric Production Analysis under Alternative Price Conditions," Public Economics Working Paper Series ces0105, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
    5. Featherstone, Allen M. & Moghnieh, Ghassan A. & Goodwin, Barry K., 1995. "Farm-level nonparametric analysis of cost-minimization and profit-maximization behavior," Agricultural Economics, Blackwell, vol. 13(2), pages 109-117, November.
    6. Silva, Elvira, 1999. "A Nonparametric Approach To Short-Run Production Analysis In A Dynamic Context," 1999 Annual meeting, August 8-11, Nashville, TN 21608, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Cherchye, Laurens & De Rock, Bram & Hennebel, Veerle, 2014. "The economic meaning of Data Envelopment Analysis: A ‘behavioral’ perspective," Socio-Economic Planning Sciences, Elsevier, vol. 48(1), pages 29-37.
    8. Fare, Rolf & Grosskopf, Shawna, 1995. "Nonparametric tests of regularity, Farrell efficiency, and goodness-of-fit," Journal of Econometrics, Elsevier, vol. 69(2), pages 415-425, October.
    9. Cherchye, Laurens & Kuosmanen, Timo & Post, Thierry, 2002. "Non-parametric production analysis in non-competitive environments," International Journal of Production Economics, Elsevier, vol. 80(3), pages 279-294, December.
    10. Frederic Ang & Pieter Jan Kerstens, 2023. "Robust nonparametric analysis of dynamic profits, prices and productivity: An application to French meat-processing firms," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(2), pages 771-809.
    11. Bar-Shira, Ziv & Finkelshtain, Israel, 1997. "Nonparametric analysis of pooled production data," Economics Letters, Elsevier, vol. 55(2), pages 173-178, August.
    12. Laurens Cherchye & Bram De Rock & Frederic Vermeulen, 2008. "Analyzing Cost-Efficient Production Behavior Under Economies of Scope: A Nonparametric Methodology," Operations Research, INFORMS, vol. 56(1), pages 204-221, February.
    13. Kuosmanen, Timo & Post, Thierry & Scholtes, Stefan, 2007. "Non-parametric tests of productive efficiency with errors-in-variables," Journal of Econometrics, Elsevier, vol. 136(1), pages 131-162, January.
    14. Laurens Cherchye & Thomas Demuynck & Bram Rock & Kristof Witte, 2014. "Non‐parametric Analysis of Multi‐output Production with Joint Inputs," Economic Journal, Royal Economic Society, vol. 124(577), pages 735-775, June.
    15. Kuosmanen, T. & Post, G.T., 2001. "Testing for Productive Efficiency with Errors-in-Variables: with an application to the Dutch electricity sesctor," ERIM Report Series Research in Management ERS-2001-22-F&A, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    16. C. Lovell & Shawna Grosskopf & Eduardo Ley & Jesús Pastor & Diego Prior & Philippe Eeckaut, 1994. "Linear programming approaches to the measurement and analysis of productive efficiency," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 2(2), pages 175-248, December.
    17. Laurens Cherchye & Thomas Demuynck & Bram De Rock & Marijn Verschelde, 2018. "Nonparametric Production Analysis with Unobserved Heterogeneity in Productivity," Working Papers ECARES 2018-25, ULB -- Universite Libre de Bruxelles.
    18. Eswaramoorthy, K., 1991. "U.S. livestock production and factor demand: a multiproduct dynamic dual approach," ISU General Staff Papers 1991010108000010523, Iowa State University, Department of Economics.
    19. Frank W. Agbola & Stephen R. Harrison, 2005. "Empirical investigation of investment behaviour in Australia's pastoral region," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(1), pages 47-62, March.
    20. Kuosmanen, Timo & Cherchye, Laurens & Sipilainen, Timo, 2006. "The law of one price in data envelopment analysis: Restricting weight flexibility across firms," European Journal of Operational Research, Elsevier, vol. 170(3), pages 735-757, May.

    More about this item

    Keywords

    ;
    ;

    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:kap:jproda:v:19:y:2003:i:1:p:5-32. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.