Fixed-Effect Estimation of Highly-Mobile Production Technologies

• Main Authors: Horrace, William Clinton, Schnier, Kurt E.
• Format: Text
• Language: English
• Published: SURFACE at Syracuse University 2008
• Subjects: Panel data; time-varying individual effect; spatial econometrics; fisheries; agriculture; heteroskedasticity; Mathematics; Bering Sea
• Online Access: https://surface.syr.edu/cpr/55; https://surface.syr.edu/context/cpr/article/1054/viewcontent/wp87.pdf

Revised from November 2006 and July 2007. We consider fixed-effect estimation of a production function where inputs and outputs vary over time, space, and cross-sectional unit. Variability in the spatial dimension allows for time-varying individual effects, without parametric assumptions on the effects. Asymptotics along the spatial dimension provide consistency and normality of the marginal products. A finite-sample example is provided: a production function for bottom-trawler fishing vessels in the flatfish fisheries of the Bering Sea. We find significant spatial variability of output (catch) which we exploit in estimation of a harvesting function.