Profit function approximations and duality applications to agriculture

Gary D. Thompson, Mark Langworthy

Research output: Contribution to journalArticle

12 Scopus citations

Abstract

Monte Carlo simulations of profit functions indicate that flexible functional forms may be ranked nearly the same with respect to Allen-Uzawa partial substitution elasticities or price and fixed factor elasticities. Flexible functional form approximations of output price elasticities are generally worse than approximations of input price or fixed factor elasticities. Minflex Laurent functional forms did not appear to approximate underlying elasticities any better than did their translog and generalized Leontief counterparts.

Original languageEnglish (US)
Pages (from-to)791-798
Number of pages8
JournalAmerican Journal of Agricultural Economics
Volume71
Issue number3
DOIs
StatePublished - Aug 1989

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Keywords

  • Flexible functional forms
  • Monte carlo simulation
  • Price elasticity estimation
  • Profit functions

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics

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