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Biases in approximating log production

Sun, K, Henderson, DJ and Kumbhakar, SC 2011, 'Biases in approximating log production' , Journal of Applied Econometrics, 26 (4) , pp. 708-714.

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Abstract

Most empirical work in economic growth assumes either a Cobb–Douglas production function expressed in logs or a log-approximated constant elasticity of substitution specification. Estimates from each are likely biased due to logging the model and the latter can also suffer from approximation bias. We illustrate this with a successful replication of Masanjala and Papagerogiou (2004) and then estimate both models in levels to avoid these biases. Our estimation in levels gives results in line with conventional wisdom.

Item Type: Article
Schools: Schools > Salford Business School > Business and Management Research Centre
Journal or Publication Title: Journal of Applied Econometrics
Publisher: Wiley
Refereed: Yes
ISSN: 0883-7252
Related URLs:
Funders: Non funded research
Depositing User: Dr Kai Sun
Date Deposited: 29 May 2015 17:20
Last Modified: 29 Oct 2015 00:47
URI: http://usir.salford.ac.uk/id/eprint/34568

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