Lecture07-2011 - Outline Stochastic Production Functions...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Outline Stochastic Production Functions Consistent Estimation Panel Data Specification The Stochastic Nature of Production: Lecture VII Charles B. Moss 1 1 University of Florida September 15, 2011 Charles B. Moss The Stochastic Nature of Production: Lecture VII Outline Stochastic Production Functions Consistent Estimation Panel Data Specification 1 Stochastic Production Functions Just and Pope Propositions Individual Functions An Alternative Specification 2 Consistent Estimation 3 Panel Data Specification Charles B. Moss The Stochastic Nature of Production: Lecture VII Outline Stochastic Production Functions Consistent Estimation Panel Data Specification Just and Pope Propositions Individual Functions An Alternative Specification Stochastic Production Functions Just, Richard E. and Rulan D. Pope. 1978. Stochastic Specificaiton of Production Functions and Economic Implications Journal of Econometrics 7(1), 67-86. Our development of the random characteristics of the production function was largely one of convenience. We started with a production function that we wanted to estimate f ( x 1 , x 2 ) = x 1 1 x 2 2 g ( x 1 , x 2 ) = a + a 1 x 1 + a 2 x 2 + A 11 x 2 1 + 2 A 12 x 1 x 2 + A 22 x 2 2 (1) Charles B. Moss The Stochastic Nature of Production: Lecture VII Outline Stochastic Production Functions Consistent Estimation Panel Data Specification Just and Pope Propositions Individual Functions An Alternative Specification In order to estimate each function, we multiplied or added a random term to each specification f ( x 1 , x 2 ) = x 1 1 x 2 2 e u ln ( f ( x 1 , x 2 )) = + 1 ln ( x 1 ) + 2 ln ( g ( x 1 , x 2 ) = a + a 1 x 1 + a 2 x 2 + A 11 x 2 1 + 2 A 12 x 1 x 2 + A 22 x 2 2 + (2) Just and Pope discuss three different specifications of the stochastic production functions y = F 1 ( X ) = f ( X ) e E [ ] = 0 y = F 2 ( X ) = f ( X ) E [ ] = 1 y = F 3 ( X ) = f ( X ) + E [ ] = 0 (3) Charles B. Moss The Stochastic Nature of Production: Lecture VII Outline Stochastic Production Functions Consistent Estimation Panel Data Specification Just and Pope Propositions Individual Functions An Alternative Specification Each of these specifications has problematic implications.Each of these specifications has problematic implications....
View Full Document

This note was uploaded on 11/08/2011 for the course AEB 6184 taught by Professor Staff during the Spring '09 term at University of Florida.

Page1 / 16

Lecture07-2011 - Outline Stochastic Production Functions...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online