Panel-Data Estimates of the Production Function and the Revenue Function: What Difference Does it Make?

22 Pages Posted: 30 Dec 2005

See all articles by Jacques Mairesse

Jacques Mairesse

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST); Maastricht University - United Nations and Maastricht Economic Research Institute on Innovation and Technology (UNU-MERIT); National Bureau of Economic Research (NBER)

Jordi Jaumandreu

Universidad Carlos III de Madrid

Abstract

The lack of individual firm information on output prices is a major problem in the econometrics of production. In particular, it may be expected to account for a significant share of the large discrepancies found between the cross-sectional and time-series estimates of capital and scale elasticities. However, taking advantage of two panel-data samples for which we had such information, we find that estimating the revenue function (using a nominal output measure) or the production function proper (using a real output measure) makes very little difference for our results. The biases due to other sources of specification errors are probably more important.

Suggested Citation

Mairesse, Jacques and Jaumandreu, Jordi, Panel-Data Estimates of the Production Function and the Revenue Function: What Difference Does it Make?. Scandinavian Journal of Economics, Vol. 107, No. 4, pp. 651-672, December 2005. Available at SSRN: https://ssrn.com/abstract=870662 or http://dx.doi.org/10.1111/j.1467-9442.2005.00431.x

Jacques Mairesse (Contact Author)

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )

15 Boulevard Gabriel Peri
Malakoff Cedex, 1 92245
France

Maastricht University - United Nations and Maastricht Economic Research Institute on Innovation and Technology (UNU-MERIT)

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Netherlands

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Jordi Jaumandreu

Universidad Carlos III de Madrid ( email )

E-28903 Getafe (Madrid)
Spain

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