Introduction to Econometric Production Analysis with R

Introduction
	Objectives of the course and the lecture notes
	An extremely short introduction to R
		Some commands for simple calculations
		Creating objects and assigning values
		Vectors
		Simple functions
		Comparing values and Boolean values
		Data sets (``data frames'')
		Functions
		Simple graphics
		Other useful commands
		Extension packages
		Reading data into R
		Linear regression
	R packages
	Data sets
		French apple producers
			Description of the data set
			Abbreviating name of data set
			Calculation of input quantities
			Calculation of total costs, variable costs, and cost shares
			Calculation of profit and gross margin
		Rice producers on the Philippines
			Description of the data set
			Mean-scaling quantities
			Logarithmic mean-scaled quantities
			Mean-adjusting the time trend
			Total costs and cost shares
			Specifying panel structure
	Mathematical and statistical methods
		Aggregating quantities
		Concave and convex functions
		Quasiconcave and quasiconvex functions
		Delta method
Primal Approach: Production Function
	Theory
		Production function
		Average products
		Total factor productivity
		Marginal products
		Output elasticities
		Elasticity of scale and most productive scale size
		Marginal rates of technical substitution
		Relative marginal rates of technical substitution
		Elasticities of substitution
			Direct elasticities of substitution
			Allen elasticities of substitution
			Morishima elasticities of substitution
		Profit maximization
		Cost minimization
		Derived input demand functions and output supply functions
			Derived from profit maximization
			Derived from cost minimization
		Suitability of the production function for econometric applications
	Productivity measures
		Average products
		Total factor productivity
	Linear production function
		Specification
		Estimation
		Properties
		Predicted output quantities
		Marginal products
		Output elasticities
		Elasticity of scale
		Marginal rates of technical substitution
		Relative marginal rates of technical substitution
		First-order conditions for profit maximization
		First-order conditions for cost minimization
		Derived input demand functions and output supply functions
	Cobb-Douglas production function
		Specification
		Estimation
		Properties
		Predicted output quantities
		Output elasticities
		Marginal products
		Elasticity of scale
		Marginal rates of technical substitution
		Relative marginal rates of technical substitution
		First and second partial derivatives
		Elasticities of substitution
			Direct elasticities of substitution
			Allen elasticities of substitution
			Morishima elasticities of substitution
		Quasiconcavity
		First-order conditions for profit maximization
		First-order conditions for cost minimization
		Derived input demand functions and output supply functions
		Derived input demand elasticities
	Quadratic production function
		Specification
		Estimation
		Properties
		Predicted output quantities
		Marginal products
		Output elasticities
		Elasticity of scale
		Marginal rates of technical substitution
		Relative marginal rates of technical substitution
		Quasiconcavity
		Elasticities of substitution
			Direct elasticities of substitution
			Allen elasticities of substitution
			Comparison of direct and Allen elasticities of substitution
		First-order conditions for profit maximization
		First-order conditions for cost minimization
	Translog production function
		Specification
		Estimation
		Statistical significance of individual inputs
		Properties
		Predicted output quantities
		Output elasticities
		Marginal products
		Elasticity of scale
		Marginal rates of technical substitution
		Relative marginal rates of technical substitution
		Second partial derivatives
		Quasiconcavity
		Elasticities of substitution
			Direct elasticities of substitution
			Allen elasticities of substitution
			Comparison of direct and Allen elasticities of substitution
		Mean-scaled quantities
		First-order conditions for profit maximization
		First-order conditions for cost minimization
	Evaluation of different functional forms
		Goodness of fit
		Test for functional form misspecification
		Theoretical consistency
		Plausible estimates
		Summary
	Non-parametric production function
Dual Approach: Cost Functions
	Theory
		Cost function
		Properties of the cost function
		Cost flexibility and elasticity of size
		Homotheticity of cost functions
		Short-run cost functions
		Cost functions with multiple outputs
		Suitability of the cost function for econometric applications
	Cobb-Douglas cost function
		Specification
		Estimation
		Properties
		Estimation with linear homogeneity in input prices imposed
		Checking concavity in input prices
		Homotheticity
		Optimal input quantities
		Optimal cost shares
		Derived input demand functions
		Derived input demand elasticities
		Cost flexibility and elasticity of size
		Marginal costs, average costs, and total costs
	Cobb-Douglas short-run cost function
		Specification
		Estimation
		Properties
		Estimation with linear homogeneity in input prices imposed
	Cobb-Douglas cost function with multiple outputs
		Specification
		Properties
		Cost flexibility and elasticity of size
	Translog cost function
		Specification
		Estimation
		Linear homogeneity in input prices
		Estimation with linear homogeneity in input prices imposed
		Cost flexibility and elasticity of size
		Homotheticity
		Marginal costs and average costs
		Derived input demand functions
		Derived input demand elasticities
		Theoretical consistency
	Translog cost function with multiple outputs
		Specification
		Properties
Dual Approach: Profit Function
	Theory
		Profit functions
		Short-run profit functions
	Graphical illustration of profit and gross margin
	Cobb-Douglas profit function
		Specification
		Estimation
		Properties
		Estimation with linear homogeneity in all prices imposed
		Checking convexity in all prices
		Predicted profit
		Optimal profit shares
		Derived output supply and input demand functions
		Derived output supply and input demand elasticities
	Cobb-Douglas short-run profit function
		Specification
		Estimation
		Properties
		Estimation with linear homogeneity in all prices imposed
		Returns to scale
		Shadow prices of quasi-fixed inputs
Efficiency Measures
	Technical efficiency
		Output-oriented technical efficiency with one output
		Input-oriented technical efficiency with one input
		Output-oriented technical efficiency with two or more outputs
		Input-oriented technical efficiency with two or more inputs
	Allocative efficiency, revenue efficiency, cost efficiency
		Output-oriented allocative efficiency and revenue efficiency
		Input-oriented allocative efficiency and cost efficiency
	Profit efficiency
	Scale efficiency
Stochastic Frontier Analysis
	Stochastic production frontiers
		Specification
			Marginal products and output elasticities in SFA models
		Skewness of residuals from OLS estimations
		Cobb-Douglas stochastic production frontier
			Estimation
			Variance parameters
			Statistical tests for inefficiencies
			Obtaining technical efficiency estimates
			Truncated normal distribution of the inefficiency term
		Translog production frontier
			Estimation
			Statistical test for inefficiencies
			Testing against the Cobb-Douglas functional form
			Obtaining technical efficiency estimates
			Truncated normal distribution of the inefficiency term
		Translog production frontier with mean-scaled variables
	Stochastic cost frontiers
		Specification
		Skewness of residuals from OLS estimations
		Estimation of a Cobb-Douglas stochastic cost frontier
		Short-run cost frontiers
		Profit frontiers
	Analyzing the effects of z variables
		Production functions with z variables
		Production frontiers with z variables
		Efficiency effects production frontiers
	Decomposition of cost efficiency
Data Envelopment Analysis (DEA)
	Preparations
	DEA with input-oriented efficiencies
	DEA with output-oriented efficiencies
	DEA with ``super efficiencies''
	DEA with graph hyperbolic efficiencies
Distance Functions
	Theory
		Output distance functions
			Properties
			Distance elasticities
			Elasticity of scale
			Optimising behaviour and distance elasticities
			Obtaining unobserved output prices
		Input distance functions
			Properties
			Distance elasticities
			Elasticity of scale
	Cobb-Douglas output distance function
		Specification
		Estimation
		Distance elasticities
		Elasticity of scale
		Properties
			Non-increasing in input quantities
			Non-decreasing in output quantities
			Quasiconvex in input quantities
			Convex in output quantities
		Efficiency estimates
	Translog output distance function
		Specification
		Estimation
		Distance elasticities
		Elasticity of scale
		Properties
			Non-increasing in input quantities
			Non-decreasing in output quantities
			Quasiconvex in input quantities
			Convex in output quantities
		Efficiency estimates
	Cobb-Douglas input distance function
		Specification
		Estimation
		Distance elasticities
		Elasticity of scale
		Properties
			Non-decreasing in input quantities
			Non-increasing in output quantities
			Concave in input quantities
			Quasiconcave in output quantities
		Efficiency estimates
	Translog input distance function
		Specification
		Estimation
		Distance elasticities
		Elasticity of scale
		Efficiency estimates
		Imposing monotonicity
Panel Data and Technological Change
	Average production functions with technological change
		Cobb-Douglas production function with technological change
			Pooled estimation of the Cobb-Douglas production function with technological change
			Panel data estimations of the Cobb-Douglas production function with technological change
		Translog production function with constant and neutral technological change
			Pooled estimation of the Translog production function with constant and neutral technological change
			Panel-data estimations of the Translog production function with constant and neutral technological change
		Translog production function with non-constant and non-neutral technological change
			Pooled estimation of a translog production function with non-constant and non-neutral technological change
			Panel-data estimations of a Translog production function with non-constant and non-neutral technological change
	Frontier production functions with technological change
		Cobb-Douglas production frontier with technological change
			Time-invariant individual efficiencies
			Time-variant individual efficiencies
			Observation-specific efficiencies
			Fixed effects in the production frontier
		Translog production frontier with constant and neutral technological change
			Observation-specific efficiencies
		Translog production frontier with non-constant and non-neutral technological change
			Observation-specific efficiencies
		Decomposition of productivity growth
	Analyzing productivity growths with Data Envelopment Analysis (DEA)
	Cost functions with technical change
		Translog cost function with constant and neutral technical change
		Translog cost function with non-constant and non-neutral technical change