Nonparametric Identification of Production Function, Total Factor Productivity, and Markup from Revenue Data

Hiroyuki Kasahara; Yoichi Sugita

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arXiv · 2011.00143

Nonparametric Identification of Production Function, Total Factor Productivity, and Markup from Revenue Data

Hiroyuki Kasahara·Yoichi Sugita

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Abstract

Commonly used methods of production function and markup estimation assume that a firm's output quantity can be observed as data, but typical datasets contain only revenue, not output quantity. We examine the nonparametric identification of production function and markup from revenue data when a firm faces a general nonparametri demand function under imperfect competition. Under standard assumptions, we provide the constructive nonparametric identification of various firm-level objects: gross production function, total factor productivity, price markups over marginal costs, output prices, output quantities, a demand system, and a representative consumer's utility function.

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Hiroyuki Kasahara, Yoichi Sugita. 2020-10-30. Nonparametric Identification of Production Function, Total Factor Productivity, and Markup from Revenue Data. https://arxiv.org/abs/2011.00143

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