Empirical properties of duality theory

This research examines selected empirical properties of duality relationships. Monte Carlo experiments indicate that Hessian matrices estimated from the normalised unrestricted profit, restricted profit and production functions yield conflicting results in the presence of measurement error and low relative price variability. In particular, small amounts of measurement error in quantity variables can translate into large errors in uncompensated estimates calculated via restricted and unrestricted profit and production functions. These results emphasise the need for high quality data when estimating empirical models in order to accurately determine dual relationships implied by economic theory.


Issue Date:
1997
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/118069
Published in:
Australian Journal of Agricultural and Resource Economics, Volume 46, Issue 1
Page range:
45-68
Total Pages:
24




 Record created 2017-04-01, last modified 2018-01-16

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