Comparison of alternative functional forms in production
type: Item
instance of: scholarly article
title: Comparison of alternative functional forms in production
zbMATH Open document ID: 0584.62194
DOI: 10.1016/0304-4076(85)90145-9
author: Peter E. Rossi
published in: Journal of Econometrics
publication date: 1985-01-01T00:00:00Z
full work available at URL: 586.pdf
review text: In this paper, a Bayesian approach to choosing between two non-nested multivariate regression systems is developed. The Bayesian approach involves the calculation of the posterior probabilities of alternative hypotheses and formation of a posterior odds ratio. Specific results are obtained for the comparison of a multivariate regression and seemingly unrelated regression model. These odds ratio results are applied to the choice between translog and Fourier flexible form cost share equation systems. When calculated for aggregate U.S. manufacturing cost data, the odds ratios favor the Fourier flexible form over the translog form. Even in small samples, the Fourier series expansion appears to be an effective approximation technique.
Mathematics Subject Classification ID: 62P20
Mathematics Subject Classification ID: 62F15
zbMATH DE Number: 3936353
zbMATH Keywords: production
zbMATH Keywords: non-nested multivariate regression systems
zbMATH Keywords: posterior probabilities
zbMATH Keywords: posterior odds ratio
zbMATH Keywords: seemingly unrelated regression model
zbMATH Keywords: translog and Fourier flexible form cost share equation systems
zbMATH Keywords: Fourier series expansion
MaRDI profile type: Publication
OpenAlex ID: W2156581484
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description: scientific article; zbMATH DE number 3936353