The vcovmethod returns the covariance matrix of all linearly independent coef. Production functions are a key part of modelling national output and national income. While there is a large body of translation process research based on translog, this paper gives an overview of the translogii functions and its data visualization options. For instance, berndt and christensen 1973 fitted a translog cost function to the u. Estimation of cobdouglas and translog production functions with capital and gender disaggregated labor inputs in the usa, journal of smart economic growth, vol. Translog supervisor is the program used to create projects see creating a project and to replay see replaying the log file, represent see linear representation, and analyse see log file analysis the information stored in log files translog supervisor is the researchers and the teachers tool for preparing tasks e. My question is about the results that i got after i did a regression on the translog production function for panel data. Johannes sauer1, heinrich hockmann2 paper prepared for. The theoretical motivation for empirical implementations of money in the production function originates from monetary growth models oflevhari and patinkin 1968,friedman 1969,johnson 1969andstein 1970, which include money directly in the production function.
The analysis estimates a short run translog cost model 1 stier 1985 found some woodusing bias over time. In addition, the study merges these two files to analyze and explore the. Pdf some aspects of the translog production function. Translogii produces a log files which contains user activity data of the reading, writing and translation processes, and which can be evaluated by external tools see tprdb. The estimation of the parameters of aggregate production functions is central to much of todays work on growth, technological change, productivity, and labor. The translog function is an attractive flexible function. Generate ces data and estimate the parameters of a translog production function. The cobbdouglas production function is still today the most ubiquitous form in theoretical and empirical analyses of growth and productivity.
Meller, the translog production function olsq and thus our. Although in more recent research the translog appears to have somewhat. Our empirical results indicate that imposing a priori. The key insights of the estimation strategy are, rst, using output demand estimates in identifying the productlevel input allocations and production functions, and second, using an inverse of. As a part of resolution we have deleted the files log1 and log2 in those folders and restarted the websphere. Translog produces a log files which contains all user activity data of the reading, writing, or translation session, and which can be evaluated by external tools. For an additive direct utility function ratios of indirect demand functions, giving. The objective of this paper is to better understand the production and cost characteristics of the u. Levinsohn 115 for the purposes of this note, the production technology is assumed to be cobb douglas yt. The next obvious step is to generate a function which allows the elasticity of substitution to change with output andor factor proportions. Before the chapter is over we will discuss ways of testing the relevance of this form for any particular situation. Approximation properties and estimation of the translog. The translog function form is widely applied in empirical studies for it is regarded as the second order approximation to the unknown function.
The importance of human capital and financial development. A production function, such as the translog transcendental logarithmic production function, can be used to model how a firm combines inputs to produce outputs. Thus, y is a function of k, l, and all possible interactions kl. The threeinput translog production function can be written in terms of logarithms as. Cornelldysonrb8228 untitled document cornell university. Translog profit function, demand elasticity, supply elasticity, elasticity of substitution 1. In the context of time series estimates of an aggregate production function for the us manufacturing sector the same result was found by berndt and christensen 1973, tables 4, 6, 7, when estimating the translog function from side conditions for profit maximization. A standard expression is to write scale effects as 1lncq. In this sense, the translog function can represent a production function that is not homogeneous.
The coef method returns a vector containing all linearly independent coef. The various ways of controlling text display makes it possible to know accurately what a subjects attention is focussed on at any. This paper provides a general theoretical and methodological framework for the estimation of the translog production function using panel data. We exploit a dataset containing timeseries from 1963 to 2011 and compare the estimates of different types of production function models.
In economics and econometrics, the cobbdouglas production function is a particular functional form of the production function, widely used to represent the technological relationship between the amounts of two or more inputs particularly physical capital and labor and the amount of output that can be produced by those inputs. The transcendental logarithmic cost function looks like. Translogii user is used to run a text production experiments a user reads, writes or translates a text. When derived demand systems are obtained from a cost function, it is possible to estimate several elasticities of substitution along with price elasticities. Following the above presented sfa framework, various production functions have been advanced 46.
Estimating production functions of multiproduct firms. View translog cost function research papers on academia. American journal of business education april 2011 volume 4. The elasticity between inputs by translog function. For now we can say that this form was popularized several generations ago by the work of cobb and douglas, who argued that this loglog form fit productionunction data better than the competitors. The translog production function and variable returns to scale. The production function is the central part of production theory and as such there is a theoretical interest in its estimates. If the null hypothesis, when equals zero, is accepted, it will indicate that 2 x is zero, and thus the termxit can be taken out of the model, leaving a specification with parameters to be compatibly assessed by resorting to smallest normal differences. The estimation is carried out using generalised least squares estimator randomeffects model under different maintained hypotheses for the underlying production technology. Parameters estimation of ces and translog production functions based on sam in a regional cge model framework. The approach explicitly recognizes that production function represents technically maximum. The aim of this study is to predict the translog production function including energy consumption for turkey. An alternative to the cobbdouglas production function is the. Translogs replay function is a powerful instrument for eliciting rich and accurate process information in retrospective interviews.
In other words, under fairly general conditions, the shape of the cost function is a mirror image of the shape of the production function. Robustness analyses are performed to test the sensitivity of the outcomes for particular specifications, sample selections, assumptions about the construction. Production functions the technology that is available to a. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. This table documents the robustness of the results in table 3. If optimized cost rises slower than output, the scale effect is positive implying a declining average cost function. For the analysis, it was utilized gdp, labor, capital, natural gas, oil and coal data. Calculating elasticities from a translog cost function overview elasticities of substitution are an important measure of production relationships. The cobbdouglas form was developed and tested against. I am not interested in the estimation of the efficiency as suggested by the command xtfrontier but rather in the estimation of the elasticities of output with respect to my three inputs. Variable elasticity substitution production function.
For well behaved functions, we can produce a cost function from a production and vice versa. The main innovations in the paper stem from the fact that we use a translog production function as a framework for estimating the relationships among economic growth and factor inputs. If the production function f or the utility function f is linearly homogeneous, then the corresponding cost function c has the following structure. This is a list of production functions that have been used in the economics literature. American economic association is collaborating with jstor to digitize, preserve and extend access to the. In the case of the translog production function the marginal product of input i. Productivity analysis for spain and the uk eu klems.
Production function estimation in stata using inputs to. In this paper we evaluate the contributions of human capital and financial development to economic growth in a panel of 82 countries covering 21 years. Youn kim abstractthis paper examines existing methods of estimating the translog production function and provides a general received for publication december 15, 1989. In particular, the cd function is the firstorder approximation of any unknown production function 50, and the translog production function is the secondorder approximation of any unknown. Some aspects of the translog production function estimation 3 production function, which takes into account a number of n inputs production factors, can be exprssed as. Some aspects of the translog production function estimation. The elasticities are evaluated at the sample means, so the means procedure is used to compute the sample mean cost shares and store this information in the dataset meanshares. Remarkably, in most applications, these inputs are not used beyond subtracting them from the grossoutput number to get value added, so the approach. I wanted to know what is the purpose of these files.
For the regression with a translog function, it is need to create a combination of the fundmental variables. Dear all, i am relatively new to stata and would like to know how to estimate the parameters of a translog production function with stata. Heineke in this paper we study the relationship between costs, input prices and activity levels in a sample of approximately thirty medium sized city police departments for the years 1968, 69, 71 and 73. This function can be approximated by second order taylor series christensen, et al. Data and parameter estimates were previously stored in datasets est and klems in the example estimating a derived demand system from a translog cost function. Calculating elasticities from a translog cost function. In the websphere application server i can see two folders namely translog and partnerlog. Chapter 9 flexible functional forms vancouver school of.