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Testing among functional forms: an extension of the Generalized Box-Cox formulation

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  • Alfons Oude Lansink
  • Geert Thijssen

Abstract

This paper uses the Generalized Box - Cox framework and Double Length artificial Regression to test whether different specifications of the profit function are able to mimic the technology underlying panel data of Dutch arable farms for the period 1970 - 1988. To this end, a linear GBC is developed that includes the Generalized Leontief, Normalized Quadratic and Symmetric Normalized Quadratic as special cases. A Lagrange multiplier test that avoids estimation of the linear GBC is used to test (subsets of) functional forms against (simplifications of) the linear GBC. Functional form results are also evaluated in terms of regularity conditions, parameter significance and reasonability of elasticities. On this data set, the NQ outperforms the other forms on most criteria.

Suggested Citation

  • Alfons Oude Lansink & Geert Thijssen, 1998. "Testing among functional forms: an extension of the Generalized Box-Cox formulation," Applied Economics, Taylor & Francis Journals, vol. 30(8), pages 1001-1010.
  • Handle: RePEc:taf:applec:v:30:y:1998:i:8:p:1001-1010
    DOI: 10.1080/000368498325174
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    References listed on IDEAS

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    Cited by:

    1. Alfons Oude Lansink, 1999. "Area Allocation Under Price Uncertainty on Dutch Arable Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(1), pages 93-105, January.
    2. Alfons Oude Lansink & Spiro Stefanou, 2001. "Dynamic Area Allocation and Economies of Scale and Scope," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(3), pages 38-52, September.
    3. Leonardo Costa, 2008. "DATA CONFESSION in the PORTUGUESE EDM REGION," Working Papers de Economia (Economics Working Papers) 092008, Católica Porto Business School, Universidade Católica Portuguesa.
    4. Magnus, Jan & Peresetsky, Anatoly, 2010. "The price of Moscow apartments," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 17(1), pages 89-105.
    5. Steffen Sebastian & R. Maurer & Martin Pitzer, 2001. "Construction of a transaction based price index for the Paris housing market," ERES eres2001_276, European Real Estate Society (ERES).

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