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The Conditional Beta Distribution as a Stochastic Production Function
Author(s) -
Nelson Carl H.,
Preckel Paul V.
Publication year - 1989
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1241595
Subject(s) - mathematics , distribution (mathematics) , statistics , yield (engineering) , conditional probability distribution , parametric statistics , conditional expectation , beta distribution , maximum likelihood , function (biology) , econometrics , production (economics) , economics , mathematical analysis , physics , biology , macroeconomics , evolutionary biology , thermodynamics
The conditional beta distribution is proposed as a parametric model of the probability distribution of agricultural output. A two‐stage maximum likelihood estimation procedure is shown to produce consistent, asymptotically efficient and normal estimates of maximum output and the parameters of the conditional distribution. Application of the procedure to data on corn yield response to fertilizers shows that fertilizers have a significant impact on each of the first three moments of the distribution of corn yield. Corn yield distributions are found to be negatively skewed, implying that above average yields are more probable than below average yields.