Econometrica: Jul, 1967, Volume 35, Issue 3

Elimination of Management Bias from Production Functions Fitted to Cross-Section Data: A Model and an Application to African Agriculture

https://doi.org/0012-9682(196707/10)35:3/4<495:EOMBFP>2.0.CO;2-Q
p. 495-508

Benton F. Massell

This paper presents a method for eliminating management bias from production functions fitted to cross-section data on multiproduct enterprises. The method is applied to a sample of peasant farms in Rhodesia. The estimates are used to calculate marginal productivities, to examine the efficiency of allocation in the sample, to assess the relative importance of factors in leading to increases in output, and to examine the characteristics of farms with a better than average performance.