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This paper explores the use of information on the firm-level prices of the producedoutput and employed inputs, as well as on the firm-level demand relationship, to identifythe parameters of the production function. By considering the system of equationswhich includes the demands for variable inputs, the demand for the product of thefirm and the pricing rule, both the production function and the cost equation can berewritten in terms of fixed inputs and exogenous determinants (semi-reduced forms).Consistent estimation of this two equation system is possible under no especial distri-butionassumptions on unobserved e ciency and, in addition, an estimate of the priceelasticity of demand is recovered.

Innovation and Welfare: Results from Joint Estimation of Production and Demand Functions