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Examination of Alternative Heteroscedastic Error Structures Using Experimental Data

Published online by Cambridge University Press:  28 April 2015

James W. Mjelde,
Oral Capps Jr. and
Ronald C. Griffin
James W. Mjelde
Affiliation:
Department of Agricultural Economics, Texas A&M University
Oral Capps Jr.
Affiliation:
Department of Agricultural Economics, Texas A&M University
Ronald C. Griffin
Affiliation:
Department of Agricultural Economics, Texas A&M University
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Abstract

Impacts of alternative specifications for heteroscedastic error structures are examined by estimating various production functions for corn in Central Texas. Production- and profit-maximizing levels of inputs and the shape of the profit equation obtained from models not corrected for heteroscedasticity differed from those obtained from models corrected for heteroscedasticity. Using the profit-maximizing input levels for each production function gave essentially the same estimated yield and profit, regardless of the specification for heteroscedasticity employed. Differences of up to one-quarter to one-third are noted, however, in the amount of profit-maximizing levels of inputs used, depending on the heteroscedasticity correction.

Keywords

cornheteroscedasticityproduction functions

Information

Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 27 , Issue 1 , July 1995, pp. 197 - 211
Copyright
Copyright © Southern Agricultural Economics Association 1995

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