Biases in approximating log production (replication data)

DOI

Most empirical work in economic growth assumes either a Cobb-Douglas production function expressed in logs or a log-approximated constant elasticity of substitution specification. Estimates from each are likely biased due to logging the model and the latter can also suffer from approximation bias. We illustrate this with a successful replication of Masanjala and Papagerogiou (The Solow model with CES technology: nonlinearities and parameter heterogeneity, Journal of Applied Econometrics 2004; 19: 171-201) and then estimate both models in levels to avoid these biases. Our estimation in levels gives results in line with conventional wisdom.

Identifier
DOI https://doi.org/10.15456/jae.2022320.0722102276
Metadata Access https://www.da-ra.de/oaip/oai?verb=GetRecord&metadataPrefix=oai_dc&identifier=oai:oai.da-ra.de:775821
Provenance
Creator Sun, Kai; Henderson, Daniel J.; Kumbhakar, Subal C.
Publisher ZBW - Leibniz Informationszentrum Wirtschaft
Publication Year 2011
Rights Creative Commons Attribution 4.0 (CC-BY); Download
OpenAccess true
Contact ZBW - Leibniz Informationszentrum Wirtschaft
Representation
Language English
Resource Type Collection
Discipline Economics