- Paper: How Reliable Is Duality Theory in Empirical Research?
- Authors: Francisco Rosas (Universidad ORT Uruguay) and Sergio H. Lence (Iowa State University)
- Speaker: Francisco Rosas
- Event: Agricultural and Applied Economics Association (AAEA) Annual Meetings
- Location: Boston, United States
- Date: August 1, 2016
The theory of duality, which establishes a relationship between a competitive firm’s profit function and its production technology, has been used, for example, to estimate elasticities.
This study highlights accuracy issues with this theory in certain practical applications due to significant biases in the estimates of known parameters of a production function.