arXiv Open Access 2025

A Generalized Control Function Approach to Production Function Estimation

Ulrich Doraszelski Lixiong Li

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Abstrak

We develop a generalized control function approach to production function estimation. Our approach accommodates settings in which productivity evolves jointly with other unobservable factors such as latent demand shocks and the invertibility assumption underpinning the traditional proxy variable approach fails. We provide conditions under which the output elasticity of the variable input -- and hence the markup -- is nonparametrically point-identified. A Neyman orthogonal moment condition ensures oracle efficiency of our GMM estimator. A Monte Carlo exercise shows a large bias for the traditional approach that decreases rapidly and nearly vanishes for our generalized control function approach.

Topik & Kata Kunci

econ.EM

Penulis (2)

Ulrich Doraszelski

Lixiong Li

Format Sitasi

APA MLA BibTeX

Doraszelski, U., Li, L. (2025). A Generalized Control Function Approach to Production Function Estimation. https://arxiv.org/abs/2511.21578

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Informasi Jurnal

Tahun Terbit: 2025
Bahasa: en
Sumber Database: arXiv
Akses: Open Access ✓