Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/192299
Authors: 
Biørn, Erik
Skjerpen, Terje
Year of Publication: 
2002
Series/Report no.: 
Discussion Papers No. 317
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
An applied econometric study of aggregation, based on an unbalanced panel data set for manu-facturing plants is presented. Panel data are informative in examining aggregation of variables, parameters, and relationships empirically since they (i) allow estimation at both the micro and the macro level, and (ii) enable comparison of the time series properties of the exactly aggre- gated micro relationships with those obtained by performing aggregation by analogy. Numerical aggregation of Translog production functions for three manufacturing industries is considered. We show, under linear aggregation of inputs and output, that departures between geometric and arithmetic means of the inputs and correlation between the log-inputs, both their levels and time paths, contribute substantially to aggregation biases in the output volume and instability of the derived input and scale elasticities. Hence, the existence and stability of an approximate "macro Translog production function" over time can be questioned.
Subjects: 
Aggregation. Panel Data. Translog. Scale elasticity. Input distribution.
JEL: 
C23
C43
D21
E23
L11
L60
Document Type: 
Working Paper

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