Using OLS regression, how would you estimate a standard Cobb-Douglas production function of the form Y-AK"LB? Specify the regression equation to be estimated. What would be the interpretation of a and B in the estimated equation? Here, Y is the output measured in 1000 rupees, K is the capital input measured in 1000 rupees, L is the labour input measured as the number of workers, A is a constant representing technological progress or total factor productivity, and a, and ß are constants that represent the share of output attributed to each input.

Using OLS regression, how would you estimate a standard Cobb-Douglas production function of the form Y-AK"LB? Specify the regression equation to be estimated. What would be the interpretation of a and B in the estimated equation? Here, Y is the output measured in 1000 rupees, K is the capital input measured in 1000 rupees, L is the labour input measured as the number of workers, A is a constant representing technological progress or total factor productivity, and a, and ß are constants that represent the share of output attributed to each input.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter4: Estimating Demand

Section: Chapter Questions

Problem 8E

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