On the Choice of Functional Forms: Summary of a Monte Carlo Experiment |
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| Authors: | Robert Gagné Pierre Ouellette |
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| Affiliation: | 1. Institut d'économie Appliquée, école des Hautes études Commerciales , Montréal , Québec , H3T 2A7 , Canada E-mail: robertg@crt.umontreal.ca;2. Département des Sciences économiques , Université du Québec à Montréal , Montréal , Québec , H3C 3P8 , Canada E-mail: ouellette.pierre@uqam.ca |
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| Abstract: | ![]()
The use of flexible functional forms is a standard practice in applied econometrics. Many flexible forms have been proposed. In this study, we investigate the behavior of three of them—the translog, the symmetric McFadden, and the symmetric generalized Barnett. Based on Monte Carlo experiments, we assess the ability of these forms to test theoretical properties and to measure technological characteristics. |
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| Keywords: | Cost function Flexible form Monte Carlo experiment Quasi-fixed input Technology measurement Test of theoretical properties |
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