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st: Von Liebig Production Function
Dear Stata listers,
I am resending this message as I did not receive it the first time that I
posted it.
I was wondering if any one knew whether it is possible to use a Von Liebig
(VL) production function using Stata code? The VL production function is
such that inputs are used in fixed proportions and the isoquants are L
shaped. Hence, if one of the inputs increase, there is no corresponding
increase in output.
More succintly, for two inputs, Water (W) and Nitrogen (N) the production
function is described as
Y(output)=min(fn(N, �n), fw(W, �w))+u
where the �'s are the associated parameters to be estimated.
It can be restated as
Y(output)=min(�n + �n.N, �w + �w.W, m) +u
where N amd W are applied quanitites of Nitrogen and Water with their
associated parameters , and parameter m is a measure of the potential
maximum yield imporsed by the scarcity of nutrients other than nitrogen and
water.
For those interested, a description can be found in - Paris and Knapp,
1989,"Estimation of von Liebig Response Functions", American Journal of
Agricultural Economics, pp 178-186.
The article shows that there are routines but I just wondered if it was
possible in Stata.
Regards,
Gauri
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