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Panel‐data Estimates of the Production Function and the Revenue Function: What Difference Does It Make? *
Author(s) -
Mairesse Jacques,
Jaumandreu Jordi
Publication year - 2005
Publication title -
the scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/j.1467-9442.2005.00431.x
Subject(s) - econometrics , economics , production (economics) , panel data , production function , function (biology) , revenue , measure (data warehouse) , capital (architecture) , scale (ratio) , microeconomics , computer science , finance , evolutionary biology , biology , history , physics , archaeology , quantum mechanics , database
The lack of individual firm information on output prices is a major problem in the econometrics of production. In particular, it may be expected to account for a significant share of the large discrepancies found between the cross‐sectional and time‐series estimates of capital and scale elasticities. However, taking advantage of two panel‐data samples for which we had such information, we find that estimating the revenue function (using a nominal output measure) or the production function proper (using a real output measure) makes very little difference for our results. The biases due to other sources of specification errors are probably more important.