Applied Econometrics with SAS

Chapter 5

Empirical Approaches to Supply Analysis

Contents

5.1 Overview

5.2 Cobb-Douglas Production

5.2.1 Econometric Analysis

5.3 Translog Functional Form

5.3.1 Empirical Analysis

5.4 Frontier Production Functions

5.4.1 Empirical Analysis

5.1 Overview

Applied production analysis is concerned with the way that real firms make choices in using inputs to supply outputs. Additionally, economists often want to be able to describe certain technological characteristics of the production process. In the previous chapter we saw mention of elasticities that can be used to characterize such relationships. A typical research question might relate to the scale elasticities of the production function. If the production function is constant returns to scale, ...