Aggregation and aggregation biases in production functions : a panel data analysis of translog models
Working paper
View/ Open
Date
2002Metadata
Show full item recordCollections
- Discussion Papers [1003]
Abstract
Abstract:
An applied econometric study of aggregation, based on an unbalanced panel data set for manu-facturing plants is presented. Panel data are informative in examining aggregation of variables, parameters, and relationships empirically since they (i) allow estimation at both the micro and the macro level, and (ii) enable comparison of the time series properties of the exactly aggre- gated micro relationships with those obtained by performing aggregation by analogy. Numerical aggregation of Translog production functions for three manufacturing industries is considered. We show, under linear aggregation of inputs and output, that departures between geometric and arithmetic means of the inputs and correlation between the log-inputs, both their levels and time paths, contribute substantially to aggregation biases in the output volume and instability of the derived input and scale elasticities. Hence, the existence and stability of an approximate "macro Translog production function" over time can be questioned.
Keywords: Aggregation. Panel Data. Translog. Scale elasticity. Input distribution.
Publisher
Statistics Norway, Research DepartmentSeries
Discussion Papers;No. 317Related items
Showing items related by title, author, creator and subject.
-
The impacts of alternative policy instruments on environmental performance. A firm level study of temporary and persistent effects
Bye, Brita; Klemetsen, Marit Elisabeth (Discussion papers;788, Working paper, 2014-10)We study the effects of various environmental regulations on environmental performance measured as emission intensity. Moreover, we aim to test whether any such effects are persistent or only temporary. Conventional theory ... -
The welfare effects of carbon policies: grandfathered quotas versus differentiated taxes
Bye, Brita; Nyborg, Karine (Discussion Papers;No. 261, Working paper, 1999)Recently, it has been demonstrated that pre-existing distortionary taxes can substantially increase the costs of market-based instruments which do not raise revenue, such as non-auctioned emissions quotas. Revenue-raising ... -
Labour market rigidities and environmental tax reforms : welfare effects of different regimes
Bye, Brita (Discussion Papers;No. 242, Working paper, 1998)The working of the labour market is important for the total welfare effects of tax reforms. This paper analyses, by using a computable general equilibrium model for the Norwegian economy, how different assumptions about ...