Risky production functions which are commonly in use are shown to be very restrictive. In particular, such functions cannot describe technologies where inputs marginally reduce risk. A simple production function which avoids these restrictions is posited and alternative estimation procedures are...

Typical econometric production practices under duality ignore the source of disturbances. We show that, depending on the source, a different approach to estimation is required. The typical approach applies under errors in factor input measurement rather than errors in optimization. An approach...

"Numéraire" prices that are measured with error create challenges for econometric estimation. A straightforward approach for a model with linear input demands, such as generated from a quadratic normalized profit function, is proposed where the "numéraire" price is measured with error....