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  6. A Monte Carlo Experiment Demonstrating Specifications Bias in Translog Cost Systems

A Monte Carlo Experiment Demonstrating Specifications Bias in Translog Cost Systems

File(s)
Cornell-Dyson-sp8609.pdf (691.59 KB)
Permanent Link(s)
https://hdl.handle.net/1813/68392
Collections
Dyson School Staff Papers
Author
Driscoll, Paul
Boisvert, Richard N.
Abstract

A Monte Carlo experiment comparing translog cost and production systems indicates that the cost systems' biased estimates of returns to scale and input substitution elasticity's result from an error in variables problem and a disturbance with non-zero mean. Guidelines for when the cost or production system is more appropriate are suggested

Date Issued
1986-05
Publisher
Charles H. Dyson School of Applied Economics and Management, Cornell University
Type
article

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