Profit Maximization: Translog Functions applied to Indian Agriculture
In this paper we test the profit maximization hypothesis using Indian agricultural data on a farm-level basis. The paper employs a translog variable profit function and the implied input share equations to test the hypothesis. The model is estimated by Zellner's Seemingly Unrelated Regressions method with restrictions within and across equations. The restrictions implied by the theory are tested. The tests reject the profit maximization hypothesis.
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