THE ROLE OF CURVATURE IN ESTIMATING ACCURATE DUAL FUNCTIONS

A production function highly concave in inputs will have a dual profit function less convex in prices. Even large variations in prices will cause little variation in input usage and output, resulting in poor profit function estimates. This is demonstrated using Monte Carlo simulation with various curvatures and error structures.

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Year of publication:	2001
Authors:	Tauer, Loren W.
Institutions:	Charles H. Dyson School of Applied Economics and Management, Cornell University
Subject:	Research Methods/ Statistical Methods

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Department of Applied Economics and Management>Working Papers Number 14752
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005513828