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Calculation of the Production Function through Entropy: A Model from Econophysics

Author

Listed:
  • Isabel Cristina Betancur

    (Universidad de Medellín)

  • Efraín Arango-Sánchez

    (Universidad de Medellín)

  • à lvaro Hernán Bedoya-Calle

    (Universidad de Medellín)

  • Francisco J. Caro- Lopera

    (Universidad de Medellin)

  • Éver Alberto Velásquez Sierra

    (Universidad de Medellín)

Abstract

From an economic perspective, the problems associated with production require a model for its estimation. These estimations are typically made using the Cobb-Douglas production function, which is derived from least-squares adjustment. However, several authors have proposed alternative methods for calculating production based on the relationship between economic and thermodynamic problems. Our study provides a method for calculating the production function through entropy, which explicitly considers the contributions of labor and capital. In this way, we apply the model to the data presented in the Cobb-Douglas study on the production of the manufacturing sector in the United States. Our results accurately describe the production data, highlight the need to estimate the Boltzmann constant in the economic model, and provide a method for determining its value

Suggested Citation

  • Isabel Cristina Betancur & Efraín Arango-Sánchez & à lvaro Hernán Bedoya-Calle & Francisco J. Caro- Lopera & Éver Alberto Velásquez Sierra, 2025. "Calculation of the Production Function through Entropy: A Model from Econophysics," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 103, pages 77-106, June.
    • Handle: RePEc:lde:journl:y:2025:i:103:p:77-106
    DOI: 10.17533/udea.le.n103a356738
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    References listed on IDEAS

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    1. Ali E. Abbas, 2006. "Maximum Entropy Utility," Operations Research, INFORMS, vol. 54(2), pages 277-290, April.
    2. David Backus & Mikhail Chernov & Stanley Zin, 2014. "Sources of Entropy in Representative Agent Models," Journal of Finance, American Finance Association, vol. 69(1), pages 51-99, February.
    3. Agerie Nega Wassihun & Tigabu Dagnew Koye & Abebe Dagnew Koye, 2019. "Analysis of technical efficiency of potato (Solanum tuberosum L.) production in Chilga District, Amhara National Regional State, Ethiopia," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-18, December.
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    Keywords

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    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics

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