Recovering the Production Technology from the Cost Function

Primon, Daniel; Sawyer, Carl
November 1993
Journal of Productivity Analysis;Nov1993, Vol. 4 Issue 4, p347
Academic Journal
An alternative technique for recovering the technology from the cost function is investigated. The recovery method uses an optimization problem with a finite number of constraints that, under appropriate conditions, has the equations of Shephard's lemma among the first order conditions. Hence, a justification is provided for the technique of recovering the production function from the cost function by solving the system of equations generated by Shephard's lemma. The alternative technique also recovers the output distance function from the cost function in the multioutput case.


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