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An Econometric Analysis of a Production Function for New Zealand - WP 01/31

Publication Details

  • An Econometric Analysis of a Production Function for New Zealand
  • Published: Dec 2001
  • Status: Current
  • Author: Szeto, Kam Leong
  • JEL Classification: C51; E23
  • Hard copy: Available in PDF format only.
 

An Econometric Analysis of a Production Function for New Zealand

New Zealand Treasury Working Paper 01/31

Published Dec 2001

Author: Kam Leong Szeto

Abstract

Using the capital stock series recently released by Statistics New Zealand, two approaches have been employed to estimate a production function. The first approach is based on the estimation of a constant elasticity of substitution (CES) production function with a value added form. The second approach is based on a nested CES function. Using the nested structure, we allow imports as an intermediate input in the production block. The estimated results reveal that the data rejects the Cobb-Douglas specification and the use of the value added form is not justifiable.

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