Parametric Aggregation of Random Coefficient Cobb-Douglas Production Functions: Evidence from Manufacturing Industries
A panel data study of parametric aggregation of a production function is presented. A four-factor Cobb-Douglas function with random and jointly normal coefficients and jointly log-normal inputs is used. Since, if the number of micro units is not too small and certain regularity conditions are met, aggregates expressed as arithmetic means can be associated with expectations, we consider conditions ensuring the existence and stability of relationships between expected inputs and expected output and discuss their properties. Existence conditions for and relationships between higher-order moments are considered. An empirical implementation based on panel data for two manufacturing industries gives decomposition and simulation results for expected output and estimates of the aggregate parameters. Illustrations of approximation procedures and aggregation errors are also given.
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- Erik Biørn & Kjersti-Gro Lindquist & Terje Skjerpen, 2000. "Micro Data On Capital Inputs: Attempts to Reconcile Stock and Flow Information," Discussion Papers 268, Statistics Norway, Research Department.
- Erik Biørn & Kjersti-Gro Lindquist & Terje Skjerpen, 2002.
"Heterogeneity in Returns to Scale: A Random Coefficient Analysis with Unbalanced Panel Data,"
Journal of Productivity Analysis,
Springer, vol. 18(1), pages 39-57, July.
- Erik Biørn & Kjersti-Gro Lindquist & Terje Skjerpen, 2000. "Heterogeneity in Returns to Scale: A Random Coefficient Analysis with Unbalanced Panel Data," Discussion Papers 292, Statistics Norway, Research Department.
- Klette, Tor Jakob & Griliches, Zvi, 1996. "The Inconsistency of Common Scale Estimators When Output Prices Are Unobserved and Endogenous," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(4), pages 343-361, July-Aug..
- Klette, T.J., 1992. "The Inconsistency of Common Scale Estimators when Output Prices are unobserved and Endogenous," Harvard Institute of Economic Research Working Papers 1586, Harvard - Institute of Economic Research.
- Tor Jakob Klette & Zvi Griliches, 1992. "The Inconsistency of Common Scale Estimators When Output Prices Are Unobserved and Engogenous," NBER Working Papers 4026, National Bureau of Economic Research, Inc.
- Tor Jakob Klette & Zvi Griliches, 1994. "The Inconsistency of Common Scales Estimators when Output Prices are Unobserved and Endogenous," Discussion Papers 127, Statistics Norway, Research Department.
- Antle, John M, 1983. "Testing the Stochastic Structure of Production: A Flexible Moment-based Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(3), pages 192-201, July.
- Erik Biørn & Terje Skjerpen, 2002. "Aggregation and Aggregation Biases in Production Functions: A Panel Data Analysis of Translog Models," Discussion Papers 317, Statistics Norway, Research Department. Full references (including those not matched with items on IDEAS)
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