Microproduction Functions with Unique Coefficients and Errors: Reconsideration and Respecification
journal contributionposted on 24.04.2015, 10:18 by P. A. V. B. Swamy, G. S. Tavlas, S. G. Hall
We use certain theoretical measures with absolute precision to uncover a microproduction function with the correct functional form and unique coefficients and error term. This function is not misspecified when its observed dependent variable is rewritten algebraically in terms of the sum of the products of observed regressors with measurement errors and time-varying coefficients and the error term with certain components. These coefficients are the sums of the appropriate partial derivatives and formulas for excluded-variable and measurement-error biases. The partial derivatives can be estimated without these biases.