Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/300673 
Authors: 
Year of Publication: 
2024
Series/Report no.: 
ZEW Discussion Papers No. 24-049
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
Production functions provide a mapping from the firms' input quantity and productivity to output quantity. This mapping only generates unbiased estimates if input and output quality variation within and between observation units is accounted for. I review and classify state-of-the-art methods to address quality and price variation in production function estimation. Even if inputs and outputs are observed in quantities, unobserved quality variation might bias production function estimates for industries with differentiated products. To account for quality variation, I introduce product characteristics to the estimation procedure and provide an application to the European car industry.
Subjects: 
Production Functions
Product Differentiation
Quality Control Functions
JEL: 
D22
D24
C38
B41
L62
Document Type: 
Working Paper

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