Cite JOURNAL ARTICLE
The Structure of Technology and Tests of a Model of Production: Reply and Further Results
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 100 (1980), Iss. 3 : pp. 229–247
The objective of the paper is to develop tests of hypotheses from production theory under more general models of production. The zero-profit model will be extended to a non-zero-profit model and the assumption of a separable or homogeneous production function will be dropped. We derive alternative econometric models, based on translog representations of production functions in two outputs and of profit functions in the corresponding prices. We present empirical tests for time series data of West-Germany for 1950 - 1973 and show the sensitivity of the results with respect to weaker assumptions on the underlying production function.