On the equivalence of two normalizations in estimating shadow cost functions

Subal C. Kumbhakar; Giannis Karagiannis

doi:10.1016/j.econlet.2003.09.013

On the equivalence of two normalizations in estimating shadow cost functions

Subal C. Kumbhakar
, Giannis Karagiannis

Economics

Binghamton University

University of Macedonia

Research output: Contribution to journal › Article › peer-review

1 Scopus citations

Abstract

We show that the shadow cost system that normalizes one price divergence parameter to unity is equivalent to the Balk system (that equates input costs based on actual and shadow prices), which is a simultaneous equation (not a seemingly unrelated regression, SUR) system.

Original language	English
Pages (from-to)	15-19
Number of pages	5
Journal	Economics Letters
Volume	82
Issue number	1
DOIs	https://doi.org/10.1016/j.econlet.2003.09.013
State	Published - Jan 2004

Keywords

Equivalence
Shadow cost functions
Two normalizations

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10.1016/j.econlet.2003.09.013

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title = "On the equivalence of two normalizations in estimating shadow cost functions",

abstract = "We show that the shadow cost system that normalizes one price divergence parameter to unity is equivalent to the Balk system (that equates input costs based on actual and shadow prices), which is a simultaneous equation (not a seemingly unrelated regression, SUR) system.",

keywords = "Equivalence, Shadow cost functions, Two normalizations",

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AB - We show that the shadow cost system that normalizes one price divergence parameter to unity is equivalent to the Balk system (that equates input costs based on actual and shadow prices), which is a simultaneous equation (not a seemingly unrelated regression, SUR) system.

KW - Equivalence

KW - Shadow cost functions

KW - Two normalizations

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DO - 10.1016/j.econlet.2003.09.013

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JO - Economics Letters

JF - Economics Letters

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ER -

On the equivalence of two normalizations in estimating shadow cost functions

Abstract

Keywords

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