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Abstract
This paper provides a theoretically consistent approach to estimating
demand relationships in which kink points occur either in the interior
or on the vertices of the budget set. There are important classes of
problems in developing countries which demonstrate such kinked budget
sets including binding non-negativity constraints. This paper also
extends these methods to the estimation of production structures. As an
application a translog cost function for three energy inputs is estimated
from cross-sections of individual Indonesian firms.