This paper compares the approximation capabilities of the minflex-Laurents translog and minflex generalized Leontief cost functions with their translog and generalized Leontief counterparts in Monte Carlo experiments. The minflex Laurent specifications generally provided closer approximations to underlying technical and economic parameters. Imposition of nonlinear restrictions on some of the parameters of the minflex Laurent models yielded measurable improvement in estimated elasticities of substitutions, returns to scale, and rates of technical change.
- Laurent functional forms
- Monte Carlo
- rates of technical change
ASJC Scopus subject areas
- Business and International Management
- Social Sciences (miscellaneous)
- Economics and Econometrics