Title: THE ESTIMATION OF LINEAR PRODUCTION FUNCTIONS HAVING MULTICOLLINEAR INPUTS
Abstract: Abstract In this paper linear production functions with highly correlated independent variables are estimated. Because many production processes require the use of inputs in fixed proportions, multicolinearity is usually a serious problem. This is usually the case when one attempts to estimate a linear or Cobb‐Douglass (in log linear form) production function. Estimates of the marginal products of a linear production function are obtained by employing the first order conditions of the output maximizing solution given a cost constraint. Parameter estimates are determined for the case where the input costs are constants. The general case, where the input prices are functions of utilization levels, is delineated.
Publication Year: 1971
Publication Date: 1971-10-01
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 4
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