Estimation of technical change and price elasticities: a categorical time–varying coefficient approach
Guohua Feng (),
Jiti Gao () and
Xiaohui Zhang ()
Additional contact information
Xiaohui Zhang: University of Exeter
Journal of Productivity Analysis, 2018, vol. 50, issue 3, 117-138
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”.
Keywords: Semiparametric Method; Categorical Time-varying Coefficient Model; Technical Change and Productivity (search for similar items in EconPapers)
JEL-codes: C33 D24 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s11123-018-0538-6 Abstract (text/html)
Access to full text is restricted to subscribers.
Working Paper: Estimation of Technical Change and Price Elasticities: A Categorical Time-varying Coefficient Approach (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kap:jproda:v:50:y:2018:i:3:d:10.1007_s11123-018-0538-6
Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11123/PS2
Access Statistics for this article
Journal of Productivity Analysis is currently edited by William Greene, Chris O'Donnell and Victor Podinovski
More articles in Journal of Productivity Analysis from Springer
Bibliographic data for series maintained by Sonal Shukla ().