Abstract

CASTELLANOS-PEREZ, Miroslava et al. Confidence region for economic optima of a Cobb-Douglas production function. Agrociencia [online]. 2006, vol.40, n.1, pp.117-124. ISSN 2521-9766.

The Cobb-Douglas model is often used in agro-economic research to model production functions. It is non-linear in the parameters when the errors are assumed additive. Once the parameters of the model are estimated, the corresponding estimators are inserted into the mathematical expression for the economic optima, the value where net income is maximized, obtaining a point estimator for the optima. This is a random variable. When an economic optima is to be estimated for a confidence region, non-linear regression methods are used. In this study a confidence region is constructed for the economic optima of a Cobb-Douglas bivariate production function, using the Wald technique described by Gallant (1987).

Keywords : Production function; Cobb-Douglas model; confidence region.