When Flexible Forms Are Asked to Flex Too Much
Taylor series-based flexible forms cannot be interpreted as Taylor series approximations unless all data used in estimation lie in a region of convergence. When flexible forms lose their Taylor series interpretation, elasticity estimates will be biased. When the flexible form is a translog, Rotterda...
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| Format: | Article |
| Language: | English |
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Western Agricultural Economics Association
1994-07-01
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| Series: | Journal of Agricultural and Resource Economics |
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| Online Access: | https://ageconsearch.umn.edu/record/31226 |
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doaj-12a3904a65f04d0f8669c9eff7f837c02020-11-25T02:17:55ZengWestern Agricultural Economics AssociationJournal of Agricultural and Resource Economics1068-55022327-82851994-07-0119118319610.22004/ag.econ.3122631226When Flexible Forms Are Asked to Flex Too MuchPaul J. DriscollTaylor series-based flexible forms cannot be interpreted as Taylor series approximations unless all data used in estimation lie in a region of convergence. When flexible forms lose their Taylor series interpretation, elasticity estimates will be biased. When the flexible form is a translog, Rotterdam, or AIDS model, the region of convergence is shown to be the entire positive orthant. Regions of convergence associated with quadratic, Leontief, and any flexible form that does not employ logged arguments are smaller and may not encompass the entire data set. Implications for production and demand analyses and experimental design are discussed.https://ageconsearch.umn.edu/record/31226flexible formsleontiefquadraticselecting functional formstranslog |
| collection |
DOAJ |
| language |
English |
| format |
Article |
| sources |
DOAJ |
| author |
Paul J. Driscoll |
| spellingShingle |
Paul J. Driscoll When Flexible Forms Are Asked to Flex Too Much Journal of Agricultural and Resource Economics flexible forms leontief quadratic selecting functional forms translog |
| author_facet |
Paul J. Driscoll |
| author_sort |
Paul J. Driscoll |
| title |
When Flexible Forms Are Asked to Flex Too Much |
| title_short |
When Flexible Forms Are Asked to Flex Too Much |
| title_full |
When Flexible Forms Are Asked to Flex Too Much |
| title_fullStr |
When Flexible Forms Are Asked to Flex Too Much |
| title_full_unstemmed |
When Flexible Forms Are Asked to Flex Too Much |
| title_sort |
when flexible forms are asked to flex too much |
| publisher |
Western Agricultural Economics Association |
| series |
Journal of Agricultural and Resource Economics |
| issn |
1068-5502 2327-8285 |
| publishDate |
1994-07-01 |
| description |
Taylor series-based flexible forms cannot be interpreted as Taylor series approximations unless all data used in estimation lie in a region of convergence. When flexible forms lose their Taylor series interpretation, elasticity estimates will be biased. When the flexible form is a translog, Rotterdam, or AIDS model, the region of convergence is shown to be the entire positive orthant. Regions of convergence associated with quadratic, Leontief, and any flexible form that does not employ logged arguments are smaller and may not encompass the entire data set. Implications for production and demand analyses and experimental design are discussed. |
| topic |
flexible forms leontief quadratic selecting functional forms translog |
| url |
https://ageconsearch.umn.edu/record/31226 |
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