Econometrica: Jul 1967, Volume 35, Issue 3

Estimation of Returns to Scale and the Elasticity of Substitution

https://doi.org/0012-9682(196707/10)35:3/4<419:EORTSA>2.0.CO;2-J
p. 419-423

G. S. Maddala, J. B. Kadane

This paper concerns itself with the following problem: Suppose the true production function is of the CES type with constant returns to scalle. If we fit an unrestricted Cobb-Douglas production function instead, what is the nature of the bias in the estimate of the returns to scale parameter?

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