On the choice offunctional forms in agricultural production analysis

This article examines the role of imperfect competition in determining total factor productivity growth (TFPG) by bringing together a New Empirical Industrial Organization (NEIO) model and the TFPG model of Good, Nadiri and Sickles (1999). Application of the integrated model to 1973-1992 data from 29 food processing industries revealed that, overall, changes in markups, economies of scale, and demand growth contributed positively to TFPG while the disembodied technical change was a negative contributor. Furthermore, the factors underlying the TFPG estimates are interactive and their net effects are starkly different from the conventional Solow (1957) residual TFPG measures, underscoring the need to account for imperfect competition, returns to scale, and demand growth in analyses of this type. JEL Classification: D43, L13, L24, L66

show abstract

“…Following Olson and Shieh (1989) and Baffes and Vasavada (1989), the cost function is assumed to take the modified generalized Leontief form…”

Section: Appendix: Estimation Of Model Parametersmentioning

confidence: 99%

Imperfect Competition and Total Factor Productivity Growth

Azzam

López

2004

Journal of Productivity Analysis

View full text Add to dashboard Cite

show abstract

“…Empirical work (e.g. Ba es and Vasavada, 1989) has demonstrated that parameter estimates and elasticities are sensitive to the functional form chosen. Hence the functional speci® cation of a pro® t or cost function can be viewed as a random model speci® cation; i.e.…”

Section: Introductionmentioning

confidence: 98%

“…This literature frequently relies on ad hoc selection criteria such as theoretical consistency, domain of applicability, exibility, computational ease, factual conformity, satisfying curvature restrictions, plausibility of the estimated elasticities and others (Lau, 1986;Ba es and Vasavada, 1989). Ba es and Vasavada, (1989) could not select a functional form, because di erent functional forms yielded inconsistent results for the same data set.…”

Section: Introductionmentioning

confidence: 98%

Testing among functional forms: an extension of the Generalized Box-Cox formulation

Thijssen¹

1998

Applied Economics

View full text Add to dashboard Cite

This paper uses the Generalized Box - Cox framework and Double Length artificial Regression to test whether different specifications of the profit function are able to mimic the technology underlying panel data of Dutch arable farms for the period 1970 - 1988. To this end, a linear GBC is developed that includes the Generalized Leontief, Normalized Quadratic and Symmetric Normalized Quadratic as special cases. A Lagrange multiplier test that avoids estimation of the linear GBC is used to test (subsets of) functional forms against (simplifications of) the linear GBC. Functional form results are also evaluated in terms of regularity conditions, parameter significance and reasonability of elasticities. On this data set, the NQ outperforms the other forms on most criteria.

show abstract

“…Besides measuring all the economically relevant effects, research economy suggests choosing functional forms that are easy to estimate and useful in empirical applications. Several FFFs for profit function have been proposed by Diewert (1973) tuid Baffes and Vasavada (1989). Generalized Leontief (Diewert, 1971), translog (Christensen et al, 1973), normalized quadratic , and generalized…”

Section: Agricultural Output Suppiv and Input Demandmentioning

confidence: 99%

An agricultural policy and trade model for Morocco

Jaouad

View full text Add to dashboard Cite

On the choice offunctional forms in agricultural production analysis

Cited by 32 publications

References 22 publications

Imperfect Competition and Total Factor Productivity Growth

Imperfect Competition and Total Factor Productivity Growth

Testing among functional forms: an extension of the Generalized Box-Cox formulation

An agricultural policy and trade model for Morocco

Contact Info

Product

Resources

About