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Ein einfaches Verfahren zur Berücksichtigung heterogener Preisbildung und Marktmacht auf unvollkommenen Gütermärkten in Produktivitätsschätzungen

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  • Carstensen, Vivian

Abstract

This paper integrates a generalized monopolistic competition model that states consumer preferences for goods' variety and, hence, heterogeneous price setting behavior into the familiar Cobb-Douglas production function approach. Neglecting the fact of incomplete markets and heterogeneous price setting leads to biased estimates of factor elasticities. Nevertheless, the respective bias can be eliminated, if two additional variable are considered in the production function: a) production volume at the sector level and b) the firm's market share. This method is applied to the manufacturing sector. In general and for consumer goods industries, the empirical results suggest the application of the developed method into productivity estimates.

Suggested Citation

  • Carstensen, Vivian, 2003. "Ein einfaches Verfahren zur Berücksichtigung heterogener Preisbildung und Marktmacht auf unvollkommenen Gütermärkten in Produktivitätsschätzungen," Hannover Economic Papers (HEP) dp-273, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    • Handle: RePEc:han:dpaper:dp-273
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    File URL: http://diskussionspapiere.wiwi.uni-hannover.de/pdf_bib/dp-273.pdf
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    References listed on IDEAS

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    1. Jacques Mairesse & Bronwyn H. Hall & Benoît Mulkay, 1999. "Firm-Level Investment in France and the United States: An Exploration of What We Have Learned in Twenty Years," Annals of Economics and Statistics, GENES, issue 55-56, pages 27-67.
    2. Klette, Tor Jakob & Griliches, Zvi, 1996. "The Inconsistency of Common Scale Estimators When Output Prices Are Unobserved and Endogenous," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(4), pages 343-361, July-Aug..
    3. Levinsohn, J. & Petrin, A., 1999. "When Industries Become More Productive, Do Firms?: Investigating Productivity Dynamics," Working Papers 445, Research Seminar in International Economics, University of Michigan.
    4. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    5. repec:adr:anecst:y:1999:i:55-56:p:02 is not listed on IDEAS
    6. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    7. James Levinsohn & Amil Petrin, 1999. "When Industries Become More Productive, Do Firms?," NBER Working Papers 6893, National Bureau of Economic Research, Inc.
    8. Tor Jakob Klette, 1994. "Estimating Price- Cost Margins and Scale Economies from a Panel of Microdata," Discussion Papers 130, Statistics Norway, Research Department.
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    Cited by:

    1. Carstensen, Vivian, 2003. "Die organisationelle Revolution: Lassen sich die postulierten Produktivitätseffekte empirisch belegen?," Hannover Economic Papers (HEP) dp-277, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.

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    More about this item

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D2 - Microeconomics - - Production and Organizations
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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