Nonparametric Estimation of Concave Production Technologies by Entropic Methods

Allon, Gad; Hackman, Steve; Beenstock, Michael; Passy, Uri; Shapiro, Alexander

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Nonparametric Estimation of Concave Production Technologies by Entropic Methods

Journal of Applied Econometrics, September 22, 2005

27 Pages Posted: 20 Jun 2006

See all articles by Gad Allon

Gad Allon

University of Pennsylvania - The Wharton School

Michael Beenstock

Hebrew University of Jerusalem - Department of Economics

Alexander Shapiro

Georgia Institute of Technology - The H. Milton Stewart School of Industrial & Systems Engineering (ISyE)

Abstract

An econometric methodology is developed for nonparametric estimation of concave production technologies. The methodology, based on the principle of maximum likelihood, uses entropic distance and convex programming techniques to estimate production functions. Empirical applications are presented to demonstrate the feasibility of the methodology in small and large data sets.

Keywords: Entropic , Nonparametric, Concave, Production

Suggested Citation: Suggested Citation

Allon, Gad and Hackman, Steven T. and Beenstock, Michael and Passy, Uri and Shapiro, Alexander, Nonparametric Estimation of Concave Production Technologies by Entropic Methods. Journal of Applied Econometrics, September 22, 2005, Available at SSRN: https://ssrn.com/abstract=907305