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The Translog Production Function and Variable Returns to Scale


  • Kim, H Youn


This paper examines existing methods of estimating the translog production function and provides a general framework that allows for variable returns to scale. The model is based on the inverse input demand function and embeds a nonhomothetic production technology. Previous estimation methods are valid only for homogeneous technologies with fixed scale effects. Estimation results for U.S. manufacturing show that neither homotheticity and homogeneity nor constant returns to scale is a proper characterization of the underlying structure of production, thereby vindicating the empirical relevance of the inverse demand framework that entails a nonhomothetic technology. Copyright 1992 by MIT Press.

Suggested Citation

  • Kim, H Youn, 1992. "The Translog Production Function and Variable Returns to Scale," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 546-552, August.
  • Handle: RePEc:tpr:restat:v:74:y:1992:i:3:p:546-52

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    References listed on IDEAS

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    3. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 38(2), pages 112-134.
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    5. Stafford, Frank P, 1987. "Women's Work, Sibling Competition, and Children's School Performance," American Economic Review, American Economic Association, vol. 77(5), pages 972-980, December.
    6. Datcher-Loury, Linda, 1988. "Effects of Mother's Home Time on Children's Schooling," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 367-373, August.
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