Farm Level Nonparametric Analysis of Profit Maximization Behavior with Measurement Error

This paper tests the farm level profit maximization hypothesis using a nonparametric production analysis approach allowing for measurement error in the input and output variables. All farms violated Varian’s deterministic Weak Axiom of Profit Maximization (WAPM). The magnitude of minimum critical standard errors required for consistency with profit maximization, convex technology production was smaller after allowing technological change during the sample period. Results indicate strong support for the presence of technological change during the sample period.


Issue Date:
2009
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/46829
Total Pages:
14
JEL Codes:
D24




 Record created 2017-04-01, last modified 2017-08-25

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