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Estimating Indirect Production Functions with a More GeneralSpecification: An Application of the Lewbel Model

Published online by Cambridge University Press:  28 April 2015

Christiana E. Hilmer  and
Matthew T. Holt
Christiana E. Hilmer
Affiliation:
Department of Economics, San Diego State University, San Diego, CA
Matthew T. Holt
Affiliation:
Department of Agricultural and Resource Economics, North Carolina State University, Raleigh, NC
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Abstract

Whereas consumer theory employs several different empirical specificationsfor estimating indirect utility functions, producer theory has relied on theTranslog specification to estimate the indirect production function. In thispaper, we apply Lewbel's more general functional specification andinvestigate its implications for the estimation of indirect productionfunctions in productivity analysis. An attractive feature of the Lewbelmodel is that it nests both the Translog and the almost ideal supply system,offering a method to assess the empirical validity of all threespecifications. Aggregate U.S. production data are used to examine theperformance of the three models in an empirical application.

Keywords

dualityindirect production functionnested testC32C52Q12
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 37 , Issue 3 , December 2005 , pp. 619 - 634
Copyright
Copyright © Southern Agricultural Economics Association 2005

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