EconPapers    
Economics at your fingertips  
 

Measurement Error and Time Aggregation: A Closer Look at Estimates of Output-Labor Elasticities

Marcello Estevão ()

No 1996-02, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: This paper analyzes the effect of time aggregation on estimates of the elasticities of output with respect to employment and to average hours of work. The main goal is to get accurate estimates of production function parameters. Low frequency data generate better estimates of output-employment elasticity while high frequency data generate better estimates of output-average hours elasticity. This result comes from the fact that time aggregation increases (decreases) the bias in the estimate of the elasticity with respect to average hours (employment). Estimations of these elasticities at different data frequencies and numerical simulations illustrate this point. In addition, this estimation methodology shows that the elasticity of output with respect to employment is bigger than the elasticity of output with respect to average hours, as theory predicts, contradicting an established result in the literature.

Keywords: hours; employment; time aggregation; Labor elasticity; production function (search for similar items in EconPapers)
Pages: 35 pages
Date: 2019-12-04
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.federalreserve.gov/pubs/feds/1996/199602/199602pap.pdf (application/pdf)

Related works:
Working Paper: Measurement error and time aggregation: a closer look at estimates of output-labor elasticities (1996) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:1996-02

Access Statistics for this paper

More papers in Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2020-10-20
Handle: RePEc:fip:fedgfe:1996-02