1. Some aspects of the translog production function estimation.
- Author
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PAVELESCU, Florin-Marius
- Subjects
ELASTICITY (Economics) ,ESTIMATION theory ,GROSS domestic product ,ECONOMIC conditions in Great Britain, 1997- ,FRENCH economy, 1995- - Abstract
In a translog production function, the number of parameters practically "explodes" as the number of considered production factors increases. Consequently, the shortcoming in the estimation of the respective production function is the occurrence of co/linearity. Theoretically, the co/linearity impact is minimum if a single production factor is taken into account. In this case, we can determine not only the output elasticity but also the elasticity of scale related to the respective production factor. In the present paper, we demonstrate that the relationship between the output elasticity and estimated average elasticity of scale depends on the dynamics trajectoty of the production factor, underexponential and overexponential, respectively. At the end, a practical example is offered, dealing with the computation of the Gross Domestic Product elasticity and average elasticity of scale related to employed population in the United Kingdom and France during 1999-2009. [ABSTRACT FROM AUTHOR]
- Published
- 2011