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Specification and Estimation of Cobb-Douglas Production Function Models
A. Zellner
J. Kmenta
J. Dreze
Abstract
In this paper we consider the specification and estimation of the Cobb-Douglas production function model. After reviewing the "traditional" specifying assumptions for the model which are based on deterministic profit maximization, we develop a model in which profits are stochastic and in which maximization of the mathematical expectation of profits is posited. "Sampling theory" and Bayesian estimation techniques for this model are presented.
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