Chapter 63 Econometric Tools for Analyzing Market Outcomes

Ackerberg, Daniel A.; Benkard, C. Lanier; Berry, Steven; Pakes, Ariél

doi:10.1016/s1573-4412(07)06063-1

Cited by 438 publications

(442 citation statements)

References 79 publications

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“…The figure plots investments against a third order polynomial in k jt and TFP (from the 31 The exhibition here also draws on Ackerberg et al (2007). 32 Note that large case letters denote variables in levels and lower case letters always denote log variables here, e.g.…”

Section: A Details On Estimation Proceduresmentioning

confidence: 99%

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Agglomeration economies with consistent productivity estimates

Ehrl

2013

Regional Science and Urban Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper investigates the relative impact of microeconomic agglomeration mechanisms on plant's total factor productivity (TFP) using German establishment and employment level data. Contrasting different strategies to estimate TFP from plant level production functions reveals that not accounting for the endogeneity of input choices and not separating price effects from true productivity leads to underestimated agglomeration economies. Under the preferred TFP measure, labor market pooling, captured by the correlation of the occupational composition between one county-industry and the rest of the county, is found to have the largest impact. Besides, two knowledge spillover mechanisms, transmitted via job changes and public R&D funding, positively affect plant productivity. Except for job changes the result is even robust when the spatial units are broadened from counties to labor market regions. Testing for urbanization and localization economies, I find that TFP is higher in more specialized and larger counties, whereas sectoral diversity is of no importance at the county level. JEL-Classification: D24, R11, R30 Terms of use: Documents in

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Section: A Details On Estimation Proceduresmentioning

confidence: 99%

“…Besides, its estimation is quite complex, as the sizable literature on this topic documents, see e.g. Ackerberg et al (2007). I account for the correlation of input choices with current productivity levels using the Olley and Pakes (1996) (OP henceforth) procedure.…”

Section: Introductionmentioning

confidence: 99%

Agglomeration economies with consistent productivity estimates

Ehrl

2013

Regional Science and Urban Economics

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“…Alongside econometric modeling ideas in Ackerberg et al (2007), the framework underlines our estimation strategy and helps us specify timing and relational assumptions for the firm decisions in a manner similar to Olley and Pakes (1996).…”

Section: Behabioural Frameworkmentioning

confidence: 99%

“…Thus, localized productive advantages will make firms willing to accept higher wages and higher rents. Consequently, both consumption 9 Note that the investment policy function in Olley and Pakes (1996) is a solution to a complicated dynamic programming problem and depends on all the primitives of the model like demand functions, the specification of sunk costs, form of conduct in the industry and other factors as discussed by Ackerberg et al (2007). All these factors are allowed here to be different across narrowly defined spatial units and evolve differently over time.…”

Section: Behabioural Frameworkmentioning

confidence: 99%

“…We extend their analysis by taking a production function approach as in Henderson (2003) and related studies to directly account for the net efect of agglomeration on productivity. We contribute to the literature by applying an advanced TFP estimation technique following modelling ideas in Olley and Pakes (1996) and Ackerberg et al (2007). 3 We explicitly model unobservable productivity utilising unique disaggregated land price and wage data and incorporate directly the effects of these and other location characteristics into the structural estimation algorithm.…”

Section: Introductionmentioning

confidence: 99%

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Is there a limit to agglomeration? Evidence from productivity of Dutch firms

Rizov¹,

Oskam²,

Walsh³

2012

Regional Science and Urban Economics

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We compute aggregate productivity of three categories of regions, classified by level of urbanization and density of economic activity in the Netherlands, from firm-specific total factor productivity (TFP) measures. TFP measures are estimated by a semi-parametric algorithm, within 2-digit industries, covering agriculture, manufacturing, construction, trade and services, using AMADEUS data over the period [1997][1998][1999][2000][2001][2002][2003][2004][2005][2006]. We analyse the productivity differentials across urbanization categories by decomposing them into industry productivity effect and industry composition effect. Our analysis indicates that there is non-linear net effect of agglomeration on productivity growth but in levels agglomeration is associated with higher productivity.

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The potential impact of reducing sodium in packaged food: The case of the Chinese instant noodles market

Chen

Zhen

2021

Agribusiness

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Reducing sodium intake has been identified as a priority and cost-effective intervention in lowering the risk of hypertension and cardiovascular diseases. To accomplish the population-wide sodium reduction, two main strategies regarding food supply have been widely discussed: one is to set mandatory standards for the sodium content of foods and the other is to call for efforts from the food industry to voluntarily reduce sodium. Using the Chinese instant noodles market as an example, we estimate a random-coefficients logit demand model to quantify the degree of substitution between competing products and between sodium and fat. The demand estimates are then used to simulate three sodium reduction strategies: a unilateral reduction by one firm, and industry-wide reductions by multiple firms with and without reformulation of fat content. We find that voluntarily sodium reduction by a single firm results in its sales loss to its competitors; an industry-wide sodium reduction causes demand reduction to be more evenly distributed across participating firms; and an industry-wide reduction accompanied by an increase in fat content largely negates the adverse effect of sodium reduction on sales but risks an increase in population fat intake. [EconLit Citations: D12; I18; L66].

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Chapter 63 Econometric Tools for Analyzing Market Outcomes

Cited by 438 publications

References 79 publications

Agglomeration economies with consistent productivity estimates

Agglomeration economies with consistent productivity estimates

Is there a limit to agglomeration? Evidence from productivity of Dutch firms

The potential impact of reducing sodium in packaged food: The case of the Chinese instant noodles market

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