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We employ a Translog functional form to estimate the parameters of the production function.
In this model, we take this assumption to the extreme and impose that the parameters of the production function are fixed.
Denoting with small letters the logs. of capital ones, (logged) TFP, a, can be computed from the estimation of the parameters of the production function using firm-level data.
This is, in part, the result of having jobs and workers being defined by structural features that do not overlap with one another: workers are characterized by skill endowments (η i ) and jobs by the parameters of the production function (β j,k j and max j ).
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We first comment on parameters outside of the production function.
Gollin (2008) assumes a different TFP parameter in the production function of employers and of own-account self-employed; under this assumption, the independence between equilibrium occupational groups and (theta ) no longer holds.
At the bottom of the Table 1 present the implied values of the production function parameters.
First, in Table 5 the estimates of the production function parameters α and γ are generally smaller.
Both forms of the production function were generated.
We now turn to coefficients of the production function.
Estimation of the production function was useful only for generating production risks.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com