Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/26449 
Year of Publication: 
2008
Series/Report no.: 
CESifo Working Paper No. 2404
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
In this paper we focus on specification of revenue functions in their dual price space. We consider two distance functions, both dual to the revenue function: Shephard output distance function and the directional output distance function, both in price space. The former is multiplicative, satisfying homogeneity, the latter is additive satisfying transitivity. Functional equation methods yield translog specification for the Shephard case and quadratic for the directional case. Monte Carlo evidence suggests that the quadratic specification more precisely represents technology.
JEL: 
D24
C63
Document Type: 
Working Paper
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