Correcting for biases when estimating production functions: an illusion of the laws of algebra?
this paper argues that the true cause of the endogeneity bias that allegedly appears when estimating production functions, and which the literature has tried to deal with since the 1940s, is s imply the result of omitted-variable bias due to an incorrect approximation to an accounting identity. As a result we question recent attempts to solve the problem by developing new estimators.
(This abstract was borrowed from another version of this item.)
Volume (Year): 32 (2008)
Issue (Month): 3 (May)
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"Estimating Production Functions Using Inputs to Control for Unobservables,"
NBER Working Papers
7819, National Bureau of Economic Research, Inc.
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- Simon, Herbert A, 1979. " On Parsimonious Explanations of Production Relations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 81(4), pages 459-74.
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