Fitting of Cobb-Douglas Production Functions: Revisited
ثبت نشده
چکیده
The set of Cobb-Douglas production functions is usually fitted by first linearizing the models through logarithmic transformation and then applying method of least squares. However, this procedure is valid only when the underlying assumption of multiplicative error-terms is justified. Unfortunately, this assumption is rarely satisfied in practice and accordingly, the results obtained are of doubtful nature. Further, nonlinear estimation procedures generally yield parameter estimates exhibiting extremely high correlations, implying thereby that the parameters are not estimated independently. In this paper, use of expected-value parameters has been highlighted and the advantages of their use have also been discussed. Finally, the developed methodology has been illustrated by applying it to the wheat yield time-series data of Punjab.
منابع مشابه
Comparing Estimations of Return to Scale in Mechanized and Semi-Mechanized Broiler Chick Farms Located in Gorgan City
Quantitative analysis of production through evaluation of inputs consumption quantity is of main principles in agricultural policies, which is followed by increasing in production through optimal use of resources. This study has been conducted to estimate different types of production functions in mechanized farms of broiler chicks located in Gorgan city. Cross-section survey data were gathered...
متن کاملAn Assessment of CES and Cobb-Douglas Production Functions
This paper surveys the empirical and theoretical literature on macroeconomic production functions and assesses whether the constant elasticity of substitution (CES) or the CobbDouglas specification is more appropriate for use in the CBO’s macroeconomic forecasts. The Cobb-Douglas’s major strengths are its ease of use and its seemingly good empirical fit across many data sets. Unfortunately, the...
متن کاملEstimating hospital production functions through flexible regression models
The subject of discussion is health care production functions. The parametric two-factor Cobb–Douglas and transcendental logarithmic (translog) production functions are frequently used. However, empirical and theoretical work has often questioned the validity of the parametric Cobb–Douglas and translog as a model for the production of health care. The aim of this study is to propose a new flexi...
متن کاملForecasting Capital Investment for Fixed-Telephony Network Switching Equipment in Tandem with NGN Migration Using Cobb-Douglas Model
This paper tries to estimate the capital investment required for the fixed-telephony network switching equipment as demanded by the fourth national development plan. As a first step, the Cobb-Douglas model is used as a successful demand forecasting model to estimate the demand over the target years. Then, an architectural plan is developed for the fixed-telephony switching network that takes in...
متن کاملA theorem on homogeneous functions and extended Cobb-Douglas forms.
A form for homogeneous functions is presented which shows them to be a very simple extension of the wellknown Cobb-Douglas functions with similar properties in production (and distribution) economics. This form thus suggests new possibilities for interpreting a wide variety of empirical and theoretical results in economics; it also provides contact with developments in other fields, such as inf...
متن کامل