ABSTRACT
The four chapters in this section contain the results from the econometric estimations and the programming approach. The chapters each address a different problem in the transition. Chapter 5 begins by attempting to incorporate relatively recent developments in production economics. Experimentation shows that even a simple version of the dual profit function approach produces poor results and offers explanations as to why this should be so with these data. Then, having established that dual forms are not appropriate, functional forms for the production function estimation are considered. Modern flexible functional forms, such as the translog were tried, both in single equation estimation and by fitting cost share equations as a simultaneous system. Not much is made of this, as these functions are too demanding of the limited data and give poor results. Thus, with some justification, the Cobb-Douglas form is chosen, despite its well-known limitations. The meaning of the Cobb-Douglas when fitted to cross section data is discussed in some detail, as these venerable old techniques prove to be more useful than the modern developments.
