Fixed-Effect Estimation of Highly Mobile Production Technologies

We consider fixed-effect estimation of a production function where inputs and outputs vary over time, space, and individual, and identify estimates of time-varying individual effects, without parametric assumptions on the effects. We discuss sufficient conditions for unbiasedness and for consistency...

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Bibliographic Details
Published in:American Journal of Agricultural Economics
Main Authors: Horrace, William C., Schnier, Kurt E.
Format: Text
Language:English
Published: Oxford University Press 2010
Subjects:
Online Access:http://ajae.oxfordjournals.org/cgi/content/short/92/5/1432
https://doi.org/10.1093/ajae/aaq071
Description
Summary:We consider fixed-effect estimation of a production function where inputs and outputs vary over time, space, and individual, and identify estimates of time-varying individual effects, without parametric assumptions on the effects. We discuss sufficient conditions for unbiasedness and for consistency and asymptotic normality along the spatial dimension. Results are applied to estimation of a harvest function for bottom trawler fishing vessels in the flatfish and groundfish fisheries of the Bering Sea. We conclude that vessel individual effects did not change between 2002 and 2004. Ranking and selection theory determines that individual effects are not statistically significant across vessels.