Importance of Functional Form in the Estimation of Welfare (The)

Catherine Kling

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: Researchers have recognized the central role that the choice of functional form has on estimates of consumer surplus. The purpose of this paper is to quantify the magnitude of errors which might arise from the use of incorrect functional forms. It describes a simulation experiment where estimated consumer surplus, based on simulated data sets, is compared with consumer surplus computed directly from the simulated data. The errors resulting from the use of mismatching functional forms range from approximately 4 percent to 107 percent.

Date: 1989-01-01
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Citations: View citations in EconPapers (17)

Published in Western Journal of Agricultural Economics 1989, vol. 14, pp. 168-74

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Journal Article: THE IMPORTANCE OF FUNCTIONAL FORM IN THE ESTIMATION OF WELFARE (1989)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:1596

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