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Please use this identifier to cite or link to this item: http://hdl.handle.net/1942/2926

Title: Incorporating price-induced innovation in a symmetric generalised McFadden cost function with several outputs
Authors: PEETERS, Ludo
Surry, Y
Issue Date: 2000
Abstract: This paper proposes a multiple-output Symmetric Generalised McFadden (SGM) cost function, incorporating both exogenous and endogenous technological change. Whilst exogenous technological change is captured by the usual time trend, endogenous or price-induced technological change is cast within a partial-adjustment framework involving lagged input prices. The study points to various dimensions or components of technological change, and allows to disentangle "pure" factor substitution, given the state of the technology, from factor substitution due to price-induced changes in technology. Under the conditions of non-jointness in input quantities, the model further allows to identify technological change biases for each output separately. An empirical application is presented in which the proposed model is applied to time-series data on the feed manufacturing industry in Belgium. To improve on the econometrics, the SGM cost function also incorporates linear splines.
Notes: Limburgs Univ Ctr, Inst Appl Econ Res, B-3590 Diepenbeek, Belgium. INRA, F-35042 Rennes, France.Peeters, L, Limburgs Univ Ctr, Inst Appl Econ Res, Univ Campus, B-3590 Diepenbeek, Belgium.
URI: http://hdl.handle.net/1942/2926
DOI: 10.1023/A:1007843928635
ISI #: 000087615200003
ISSN: 0895-562X
Category: A1
Type: Journal Contribution
Validation: ecoom, 2001
Appears in Collections: Research publications

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