Data on Economic Research Published by Researchers at Technical University of Denmark
2012 MAY 4 - (VerticalNews.com) -- According to the authors of a study from Roskilde, Denmark, "Estimation of the non-linear Constant Elasticity of Scale (CES) function is generally considered problematic due to convergence problems and unstable and/or meaningless results."
"These problems often arise from a non-smooth objective function with large flat areas, the discontinuity of the CES function where the elasticity of substitution is one, and possibly significant rounding errors where the elasticity of substitution is close to one," wrote A. Henningsen and colleagues, Technical University of Denmark.
The researchers concluded: "We suggest three (combinable) solutions that alleviate these problems and improve the reliability and stability of the results."
Henningsen and colleagues published the results of their research in Economics Letters (On estimation of the CES production function-Revisited. Economics Letters, 2012;115(1):67-69).
For additional information, contact A. Henningsen, Technical University of Denmark, Syst Anal Div, Riso Natl Lab Sustainable Energy, DK-4000 Roskilde, Denmark.
The publisher of the journal Economics Letters can be contacted at: Elsevier Science Sa, PO Box 564, 1001 Lausanne, Switzerland.
Keywords: City:Roskilde, Country:Denmark, Region:Europe, Economic Research
This article was prepared by VerticalNews Economics editors from staff and other reports. Copyright 2012, VerticalNews Economics via VerticalNews.com.