Econometrica: Jan 1962, Volume 30, Issue 1

Estimation of Production Function Parameters Combining Time-Series and Cross-Section Data

https://doi.org/0012-9682(196201)30:1<34:EOPFPC>2.0.CO;2-8
p. 34-53

Irving Hoch

This paper is concerned with the estimation of Cobb-Douglas production function parameters by the analysis of variance, using combined time-series and cross-section data. Some theoretical development is followed by empirical results for a sample of farm firms over a period of years. Estimated marginal returns per dollar of expenditure are obtained for inputs of the "average" firm; returns to labor are below one dollar, and returns to other inputs are above one dollar. Firm constants and time constants are obtained and interpreted. There is a drop in the sum of elasticities as one moves from the usual least squares estimates to analysis of covariance estimates. Alternative explanations for this decrease are considered.

Log In To View Full Content

Back