EconPapers    
Economics at your fingertips  
 

On Input Market Frictions and Estimation of Factors’ Demand

Arnaud Dupuy () and Todd Sorense
Additional contact information
Todd Sorense: Department of Economics, University of California, Riverside. todd.sorensen@ucr.edu. 4128 Sproul Hall, 900 University Ave. Riverside, CA 92521

No 2012/11, Working Papers from Maastricht School of Management

Abstract: In this paper we explore the impact of imperfectly competitive input markets on production function estimation. First order pro t maximizing conditions are altered when frictions in input markets cause the elasticity of input supply to the rm to be nite. A consequence of this is that the standard econometric model used for production function estimation will be misspeci ed. We prove that, in all non trivial cases, nite elasticities of supply to the rm will lead to inconsistent estimates of production function parameters. Monte Carlo simulations show that the resulting bias can be economically signi cant.

Keywords: Input Market Frictions; Labor Market Frictions; Estimation of Factor Demand (search for similar items in EconPapers)
JEL-codes: D2 J42 J23 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2012-03
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://web2.msm.nl/RePEc/msm/wpaper/MSM-WP2012-11.pdf First version, 2012 (application/pdf)

Related works:
Journal Article: On Input Market Frictions and Estimation of Factors' Demand (2014) Downloads
Journal Article: On Input Market Frictions and Estimation of Factors' Demand (2014) Downloads
Working Paper: On Input Market Frictions and Estimation of Factors' Demand (2013) Downloads
Working Paper: On Input Market Frictions and Estimation of Factors Demand (2011) 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:msm:wpaper:2012/11

Access Statistics for this paper

More papers in Working Papers from Maastricht School of Management Contact information at EDIRC.
Bibliographic data for series maintained by Maud de By ().

 
Page updated 2021-04-08
Handle: RePEc:msm:wpaper:2012/11