arXiv 9 Dec 2022 · Econometrics
arXiv:2212.04620 · PDF · DOI · OpenAlex · Extracted main text
Production functions are potentially misspecified when revenue is used as a proxy for output. I formalize and strengthen this common knowledge by showing that neither the production function nor Hicks-neutral productivity can be identified with such a revenue proxy. This result obtains when relaxing the standard assumptions used in the literature to allow for imperfect competition. It holds for a large class of production functions, including all commonly used parametric forms. Among the prevalent approaches to address this issue, only those that impose assumptions on the underlying demand system can possibly identify the production function.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Mert Demirer (2022) Production function estimation with factor-augmenting technology: An application to markups | 1.000 | 9 | 3 | 100% |
| 2 | Jan De Loecker, Pinelopi K Goldberg, Amit K Khandelwal, and Nina Pav… (2016) Prices, markups, and trade reform | 1.000 | 7 | 3 | 100% |
| 3 | Emmanuel Dhyne, Amil Petrin, Valerie Smeets, and Frederic Warzynski (2020) Theory for extending single-product production function estimation to multi-product settings | 1.000 | 6 | 3 | 100% |
| 4 | Daniel A Ackerberg, Kevin Caves, and Garth Frazer (2015) Identification properties of recent production function estimators | 1.000 | 5 | 3 | 100% |
| 5 | Jan De Loecker (2021) Comment on (Un) pleasant... by Bond et al (2020) | 0.928 | 4 | 3 | 100% |
| 6 | Amit Gandhi, Salvador Navarro, and David A Rivers (2020) On the identification of gross output production functions | 0.874 | 9 | 2 | 100% |
| 7 | Jan De Loecker (2011) Product differentiation, multiproduct firms, and estimating the impact of trade liberalization on productivity | 0.874 | 6 | 2 | 100% |
| 8 | Scott Orr (2022) Within-firm productivity dispersion: Estimates and implications | 0.874 | 5 | 2 | 100% |
| 9 | Robert G Chambers (1988) Applied production analysis: a dual approach | 0.794 | 6 | 3 | 50% |
| 10 | Daniel McFadden (1978) Cost, revenue, and profit functions | 0.737 | 3 | 3 | 67% |
Showing the top 10 of 47 scored citations.