Projects per year
Abstract
We propose a categorical time-varying coefficient translog cost function, where each coefficient is expressed as a nonparametric function of a categorical time variable, thereby allowing each time period to have its own set of coefficients. Our application to U.S. electricity firms reveals that this model offers two major advantages over the traditional time trend representation of technical change: (1) it is capable of producing estimates of productivity growth that closely track those obtained using the Törnqvist approximation to the Divisia index; and (2) it can solve a well-known problem commonly referred to as “the problem of trending elasticities”.
Original language | English |
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Pages (from-to) | 117-138 |
Number of pages | 22 |
Journal | Journal of Productivity Analysis |
Volume | 50 |
Issue number | 3 |
DOIs | |
Publication status | Published - Dec 2018 |
Keywords
- Categorical Time-varying Coefficient Model
- Semiparametric Method
- Technical Change and Productivity
Projects
- 2 Finished
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Non- and Semi-Parametric Panel Data Econometrics: Theory and Applications
Gao, J. & Phillips, P.
Australian Research Council (ARC), Monash University, Yale University
1/01/15 → 31/12/19
Project: Research
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Trending Time Series Models with Non- and Semi-Parametric Methods
Gao, J., Zhang, X. & Tjostheim, D.
Australian Research Council (ARC), Monash University
3/01/13 → 21/03/16
Project: Research