Abstract
Empirical results obtained by an analyst may depend on prior choice of functional form.Three alternative parametric specifications of the cost function are considered. These are generalized leontief, translog, and normalized quadratic functions. Performance of these functional forms is evaluated by Allen elasticities of substitution, biases in technical change, and some theory–based hypotheses. All three parametric specifications yielded mixed results. Together empirical results reinforce the need for model ‘specification searches’
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