Comparison of Alternative Functional Forms with Application to Agricultural Input Data

The goal in input demand analysis is to generate a system of equations relating factor shares and possibly total expenditures to input prices and output. Regression can then be used to produce estimates of elasticities or test hypotheses of interest. Generally, consideration is limited to systems derived from either production functions or the dual cost or profit functions, and the problem of specifying the functional form is that of approximating these unknown functions.