Estimating Production Functions Using Inputs to Control for Unobservables
Bibliographic Data
| ID | 23313744 |
|---|---|
| Authors | James Levinsohn (University of Michigan), Amil Petrin (University of Chicago) |
| Year | 2003 |
| Volume | 70 |
| Issue | 2 |
| Pages | 317-341 |
| Publication date | 2003-04-01 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | The Review of Economic Studies (JOURNAL) |
| Journal identifiers | ISSN: 0034-6527 • E-ISSN: 1467-937X |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/1467-937x.00246 |
| OpenAlex | W3021040265 |
| Language | EN |
| Citations received | 640 |
| References cited | 19 |
We add to the methods for conditioning out serially correlated unobserved shocks to the production technology. We build on ideas first developed in Olley and Pakes (1996). They show how to use investment to control for correlation between input levels and the unobserved firm-specific productivity process. We show that intermediate inputs (those inputs which are typically subtracted out in a value-added production function) can also solve this simultaneity problem. We discuss some theoretical benefits of extending the proxy choice set in this direction and our empirical results suggest these benefits can be important.
Autocorrelation · Control (management) · Econometrics · Economics · Function (biology) · Investment (military) · Macroeconomics · Microeconomics · Process (computing) · Production (economics) · Productivity · Simultaneity · Statistics · Value (mathematics) · Artificial Intelligence · Auction Theory and Applications · Capital Investment and Risk Analysis · Computer Science · Economic theories and models · Mathematics
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| Unique citing works | 640 |
|---|---|
| Citations per year | 29,09 |
| Citation span | 2004 - 2026 (23) |
| Citation velocity | current |
| Highly cited | Yes |
| Citation types | Neutral: 636 |