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Implicit Netput Functions

Author

Listed:
  • Rulon D. Pope
  • Jeffrey T. LaFrance

Abstract

This paper proposes a new way to empirically model netput functions. It argues for the flexibility and rationality of specifying netputs as a function of competitive prices, fixed inputs, and restricted profit. We call these implicit netput functions because they depend on restricted profit. Doing so invites the adoption of recent developments in consumer theory to production theory. New aggregable forms are investigated and applied to U.S. agricultural production illustrating the benefits of this approach.

Suggested Citation

  • Rulon D. Pope & Jeffrey T. LaFrance, 2012. "Implicit Netput Functions," Monash Economics Working Papers 01-12, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2012-01
    as

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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2012/0112implicitnetputpopelafrance2%5B2%5D.pdf
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    References listed on IDEAS

    as
    1. Russell, Thomas & Farris, Frank, 1993. "The geometric structure of some systems of demand equations," Journal of Mathematical Economics, Elsevier, vol. 22(4), pages 309-325.
    2. Russell, Thomas, 1983. "On a theorem of Gorman," Economics Letters, Elsevier, vol. 11(3), pages 223-224.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    aggregation; production; implicit netputs;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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