Econometrica: Oct, 1966, Volume 34, Issue 4

Specification and Estimation of Cobb-Douglas Production Function Models

https://doi.org/0012-9682(196610)34:4<784:SAEOCP>2.0.CO;2-Y
p. 784-795

A. Zellner, J. Dreze, J. Kmenta

In this paper we consider the specification and estimation of the Cobb-Douglas production function model. After reviewing the "traditional" specifying assumptions for the model which are based on deterministic profit maximization, we develop a model in which profits are stochastic and in which maximization of the mathematical expectation of profits is posited. "Sampling theory" and Bayesian estimation techniques for this model are presented.