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Estimation of Multi-output Production Functions with Incomplete Data: A Generalised Maximum Entropy Approach

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  • Lence, Sergio H
  • Miller, Douglas J

Abstract

One problem commonly encountered when analysing multiproduct-multifactor firms is the lack of activity-specific input data. The present study contributes to the empirical literature on production functions by presenting an information theoretic approach to estimating production functions in the absence of activity-specific input allocations. The procedure relies solely on production data, so that behavioural hypotheses (e.g., profit maximisation) are not required and estimation can proceed in the absence of price data. In addition, the method can be applied to ill-posed problems. The proposed procedure is demonstrated with simulated production data and exhibits favourable statistical properties. Copyright 1998 by Oxford University Press.

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  • Lence, Sergio H & Miller, Douglas J, 1998. "Estimation of Multi-output Production Functions with Incomplete Data: A Generalised Maximum Entropy Approach," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 25(2), pages 188-209.
  • Handle: RePEc:oup:erevae:v:25:y:1998:i:2:p:188-209
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    Cited by:

    1. Heckelei, Thomas & Britz, Wolfgang, 2000. "Positive Mathematical Programming with Multiple Data Points: A Cross-Sectional Estimation Procedure," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 57.
    2. Arfini, Filippo & Donati, Michele & Paris, Quirino, 2008. "Innovation in Estimation of Revenue and Cost Functions in PMP Using FADN Information at Regional Level," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44008, European Association of Agricultural Economists.
    3. Letort, Elodie & Carpentier, Alain, 2009. "Endogeneity of acreage choices in input allocation equations: implied problems and a solution," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49217, Agricultural and Applied Economics Association.
    4. Zheng, Y. & Gohin, A., 2018. "Estimating dynamic stochastic decision models: explore the generalized maximum entropy alternative," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276001, International Association of Agricultural Economists.
    5. Louhichi, Kamel & Jacquet, Florence & Butault, Jean Pierre, 2012. "Estimating input allocation from heterogeneous data sources: A comparison of alternative estimation approaches," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 13(2), pages 1-20.
    6. Arfini, Filippo & Donati, Michele & Marongiu, Sonia & Cesaro, Luca, 2012. "Farm production costs estimation trough PMP Models: an application in three Italian Regions," 2012 First Congress, June 4-5, 2012, Trento, Italy 124117, Italian Association of Agricultural and Applied Economics (AIEAA).
    7. You, Liangzhi & Wood, Stanley & Wood-Sichra, Ulrike, 2009. "Generating plausible crop distribution maps for Sub-Saharan Africa using a spatially disaggregated data fusion and optimization approach," Agricultural Systems, Elsevier, vol. 99(2-3), pages 126-140, February.
    8. Somwaru, Agapi & Valdes, Constanza, 2004. "Brazil's Beef Production and Its Efficiency: A Comparative Study of Scale Economies," Conference papers 331294, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Arndt, Channing & Benfica, Rui & Tarp, Finn & Thurlow, James & Uaiene, Rafael, 2010. "Biofuels, poverty, and growth: a computable general equilibrium analysis of Mozambique," Environment and Development Economics, Cambridge University Press, vol. 15(1), pages 81-105, February.
    10. Yves Léony & Ludo Peeters & Maurice Quinqu & Yves Surry, 1999. "The Use of Maximum Entropy to Estimate Input‐Output Coefficients From Regional Farm Accounting Data," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(3), pages 425-439, September.
    11. Msangi, Siwa & Howitt, Richard E., 2006. "Estimating Disaggregate Production Functions: An Application to Northern Mexico," 2006 Annual meeting, July 23-26, Long Beach, CA 21080, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. António Xavier & Rui Fragoso & Maria De Belém Costa Freitas & Maria Do Socorro Rosário & Florentino Valente, 2018. "A Minimum Cross-Entropy Approach to Disaggregate Agricultural Data at the Field Level," Land, MDPI, vol. 7(2), pages 1-16, May.
    13. Steven Sexton & David Zilberman, 2011. "Land for Food and Fuel Production: The Role of Agricultural Biotechnology," NBER Chapters, in: The Intended and Unintended Effects of US Agricultural and Biotechnology Policies, pages 269-288, National Bureau of Economic Research, Inc.
    14. Gocht, Alexander, 2008. "Estimating input allocation for farm supply models," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6469, European Association of Agricultural Economists.
    15. Raja Chakir, 2009. "Spatial Downscaling of Agricultural Land-Use Data: An Econometric Approach Using Cross Entropy," Land Economics, University of Wisconsin Press, vol. 85(2), pages 238-251.
    16. Howitt, Richard E. & Msangi, Siwa, 2002. "Reconstructing Disaggregate Production Functions," 2002 Annual meeting, July 28-31, Long Beach, CA 19585, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    17. Mueller, Marc, 2004. "Where Has All The Water Gone? Estimation Of A Production Function For The Agricultural Sector In The Region Khorezm, Uzbekistan," 2004 Annual meeting, August 1-4, Denver, CO 20106, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Steven Sexton & David Zilberman, 2011. "How Agricultural Biotechnology Boosts Food Supply and Accomodates Biofuels," NBER Working Papers 16699, National Bureau of Economic Research, Inc.
    19. Letort, Elodie & Carpentier, Alain, 2010. "Variable Input Allocation: Why Heterogeneity Matters?," 120th Seminar, September 2-4, 2010, Chania, Crete 109387, European Association of Agricultural Economists.
    20. Groeneveld, Rolf & van Ierland, E. C. & Hejiman, W. J. M., 1999. "A comparison of approaches to spatially explicit modelling of land use/cover change," ERSA conference papers ersa99pa431, European Regional Science Association.
    21. Anderson, Weston & You, Liangzhi & Wood, Stanley & Wood-Sichra, Ulrike & Wu, Wenbin, 2014. "A comparative analysis of global cropping systems models and maps:," IFPRI discussion papers 1327, International Food Policy Research Institute (IFPRI).
    22. Maximilian Koppenberg, 2023. "Markups, organic agriculture and downstream concentration at the example of European dairy farmers," Agricultural Economics, International Association of Agricultural Economists, vol. 54(2), pages 161-178, March.
    23. Heckelei, T. & Wolff, H., 2001. "Ansätze zur (Auf-)Lösung eines alten Methodenstreits: Ökonometrische Spezifikation von Programmierungsmodellen zur Agrarangebotsanalyse," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 37.
    24. You, Liangzhi & Wood, Stanley & Wood-Sichra, Ulrike, 2004. "Generating Plausible Crop Distribution Maps For Sub-Sahara Africa Using Spatial Allocation Model," 2004 Annual meeting, August 1-4, Denver, CO 19965, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    25. Arfini, Filippo & Donati, Michele & Grossi, L. & Paris, Quirino, 2008. "Revenue and Cost Functions in PMP: a Methodological Integration for a Territorial Analysis of CAP," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6636, European Association of Agricultural Economists.

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