A flexible cost share approach to markup estimation

Devesh Raval

Economics Letters, 2023, vol. 230, issue C

Abstract: Under the production approach to markup estimation, the markup is the output elasticity of any variable input divided by the input’s share of revenue. However, output elasticities vary across producers due to non-neutral technological differences. I develop a flexible cost share estimator to account for such heterogeneity when estimating the output elasticity. This estimator generates markups that are similar when estimated with different inputs.

Keywords: Production function; Productivity; Markups (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:230:y:2023:i:c:s0165176523002872

DOI: 10.1016/j.econlet.2023.111262

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