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A Monte Carlo Experiment Demonstrating Specifications Bias in Translog Cost Systems

A Monte Carlo experiment comparing translog cost and production systems indicates that the cost systems' biased estimates of returns to scale and input substitution elasticity's result from an error in variables problem and a disturbance with non-zero mean. Guidelines for when the cost or production system is more appropriate are suggested
Year of publication:
1986-05
Authors: Driscoll, Paul ; Boisvert, Richard N.
Institutions: Charles H. Dyson School of Applied Economics and Management, Cornell University
Subject: Demand and Price Analysis
Extent:
application/pdf
Series:
Type of publication: Book / Working Paper
Notes:
The text is part of a series Department of Applied Economics and Management>Staff Papers Number 186345
Source:
Persistent link: https://www.econbiz.de/10011082967
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