Prices, Profits, Proxies, and Production

Victor Aguiar, Roy Allen and Nail Kashaev

No 20202, University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers from University of Western Ontario, Centre for Human Capital and Productivity (CHCP)

Abstract: This paper studies nonparametric identification and counterfactual bounds for heterogeneous firms that can be ranked in terms of productivity. Our approach works when quantities and prices are latent rendering standard approaches inapplicable. Instead, we require observation of profits or other optimizing-values such as costs or revenues, and either prices or price proxies of flexibly chosen variables. We extend classical duality results for price-taking firms to a setup with discrete heterogeneity, endogeneity, and limited variation in possibly latent prices. Finally, we show that convergence results for nonparametric estimators may be directly converted to convergence results for production sets.

Keywords: counterfacutal bounds; cost minimization; nonseparable heterogeneity; partial identification; profif maximization; production set; revenue maximization; shape restrictions (search for similar items in EconPapers)
Date: 2020
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Related works:
Journal Article: Prices, profits, proxies, and production (2023)
Working Paper: Prices, Profits, Proxies, and Production (2022)
Working Paper: Prices, Profits, Proxies, and Production (2022)
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