Sun, Kai and Henderson, Daniel J. and Kumbhakar, Subal C. (2010): Biases in approximating log production. Forthcoming in: Journal of Applied Econometrics
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Most empirical work in economic growth assumes either a Cobb-Douglas production function expressed in logs or a log-approximated constant elasticity of substitution specification. Estimates from each are likely biased due to logging the model and the latter can also suffer from approximation bias. We illustrate this with a successful replication of Masanjala and Papagerogiou (2004) and then estimate both models in levels to avoid these biases. Our estimation in levels gives results in line with conventional wisdom.
|Item Type:||MPRA Paper|
|Original Title:||Biases in approximating log production|
|Keywords:||Nonparametric, Kmenta Approximation, Levels, Logs, PPML|
|Subjects:||C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C13 - Estimation: General
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity
C - Mathematical and Quantitative Methods > C0 - General > C01 - Econometrics
|Depositing User:||Daniel J. Henderson|
|Date Deposited:||21. Dec 2010 08:02|
|Last Modified:||12. Feb 2013 16:18|
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