Multi-input multi-output cost function for IFM-CAP model
(2015) , 111 p. pages
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- Abstract
- This rst part gives the main concepts for estimating a nested multi-input and multi-output cost function, preparing farm accounting data into input and output categories at dierent levels of aggregation and proceeding to the econometric estimation. These concepts will be implemented in the following parts of this project. With respect to previous work in that empirical domain, in particular the work as reported in Henry de Frahan et al. (2011) and De Blander et al. (2011), this work adds the original feature of introducing and implementing a cost function that is nested in an upper and a lower level of both input and output categories that allows to consider a wider range of input and output categories that is generally not considered in the available empirical literature on cost functions. The authors are not aware of previous development of a nested cost function in the literature while the concept of nested functions is widely used for production and utility functions. With respect to this previous work, this work also calculates dierently land and non-land capital inputs, using a better estimate of the opportunity cost of capital as suggested in Andersen et al. (2011). This nal report is organized in three parts, each one introducing the concept for estimating a nested multi-input and multi-output cost function, the concept for preparing farm accounting data into input and output categories at dierent levels of aggregation and the concept for proceeding to the econometric estimation.
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Citations
Henry de Frahan, B., Dong, M. G., & De Blander, R. (2015). Multi-input multi-output cost function for IFM-CAP model. https://hdl.handle.net/2078.5/34447