Structural identification of production functions

Daniel Ackerberg, Kevin Caves and Garth Frazer

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines some of the recent literature on the identi�cation of production functions. We focus on structural techniques suggested in two recent papers, Olley and Pakes (1996), and Levinsohn and Petrin (2003). While there are some solid and intuitive indenti�cation ideas in these papers, we argue that the techniques, particularly those of Levinsohn and Petrin, su¤er from collinearity problems which we believe cast doubt on the methodology. We then suggest alternative methodologies which make use of the ideas in these papers, but do not su¤er from these collinearity problems.

Keywords: Production Functions; Industrial Organization (search for similar items in EconPapers)
JEL-codes: D24 L11 (search for similar items in EconPapers)
Date: 2006-12-26
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Citations: View citations in EconPapers (592)

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