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http://hdl.handle.net/10419/24418
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| Title: | | Imposing and testing curvature conditions on a Box-Cox function  |
| Authors: | | Koebel, Bertrand M. Falk, Martin Laisney, François |
| Issue Date: | | 2000 |
| Series/Report no.: | | ZEW Discussion Papers 00-70 |
| Abstract: | | We present a new method for imposing and testing concavity of a cost function using asymptotic least squares, which can easily be implemented even for cost functions which are nonlinear in parameters. We provide an illustration on the basis of a (generalized) Box-Cox cost function with six inputs: capital, labor disaggregated in three skill levels, energy, and intermediate materials. A parametric test of the concavity of the cost function in prices is presented, and price elasticities are compared when curvature conditions are imposed and when they are not. The results show that, although concavity is statistically rejected, the estimates are not very sensitive to its imposition. We find that substitution is stronger between the different types of labor than between any other pair of inputs. |
| Subjects: | | input demands concavity inequality restrictions Box-Cox |
| JEL: | | J31 C33 J21 E23 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des ZEW ZEW Discussion Papers
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