Least Deviance Estimation bootstrap techniques applied to aggregated production elasticity coefficients. Empirical evidence from the Palestinian Industry
Keywords:
aggregate elasticity estimation, bootstrap LAD estimator, production elasticity, developing countriesAbstract
The aim of this paper is to provide production elasticity estimates for the aggregate production functions of developing countries. We use aggregate data concerning the production sectors from two Middle Eastern countries. Unfortunately, the available data are quite of bad quality (small samples with high variability and time inconsistency), implying that the traditional OLS-estimates are biased. We propose an estimation procedure based on the bootstrap least deviance technique and find that the estimated elasticity is both significant and robust. For time-saving purposes, we repeat estimates for three available cross-sections of 71 manufacturing aggregates, and obtain increasing returns to scale for the manufacturing sector, which are supposed to reflect the imperfect competition of the market and/or the existence of high set-up or sunk costs, that are mandatory in order to produce at all.Downloads
Published
How to Cite
Issue
Section
License
The Annals of Spiru Haret University. Economic Series operates under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, granting authors full copyright of their work without restrictions. This licensing framework ensures that the journal’s content can be shared and adapted non-commercially, provided appropriate credit is given and derivative works are distributed under the same terms.
By adhering to these principles, the journal reaffirms its commitment to promoting high-caliber research and supporting the global exchange of economic knowledge.