Can random coefficient Cobb-Douglas production functions be aggregated to similar macro functions?

Arbeitspapier

Parametric aggregation of heterogeneous micro production technologies is discussed. A four-factor Cobb-Douglas function with normally distributed firm specific coefficients and with log-normal inputs (which agrees well with the available data) is speciffied. Since, if the number of micro units is large enough, aggregates expressed as arithmetic means can be associated with expectations, we consider conditions ensuring an approximate relation of Cobb-Douglas form to exist between expected output and expected inputs. Similar relations in higher-order moments are also derived. It is shown how the aggregate input elasticities depend on the coefficient heterogeneity and the co-variance matrix of the log-input vector and hence vary over time. An implementation based on firm panel data for two manufacturing industries gives estimates of industry level input elasticities and decomposition for expected output. Finally, aggregation errors which emerge when the correct aggregate elasticities are replaced by the expected micro elasticities, are explored.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Memorandum ; No. 2004,22

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Index Numbers and Aggregation; Leading indicators ; Firm Behavior: Theory ; Production, Pricing, and Market Structure; Size Distribution of Firms
• Thema: Productivity ; Panel ; Data ; Random ; coefficients ; Log-normal ; distribution ; Aggregate ; production ; function ; Cobb-Douglas-Produktionsfunktion ; Produktivität ; Produktionsfunktion ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Biørn, Erik ; Skjerpen, Terje ; Wangen, Knut R.
• Ereignis: Veröffentlichung
• (wer): University of Oslo, Department of Economics
• (wo): Oslo
• (wann): 2004

Weitere Informationen

• Handle: http://hdl.handle.net/10419/63193
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ