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Table 1: Selected Production Function Studies
| AUTHOR | EQUATION | DATA | ELASTICITY* | COMMENTS |
| ASCHAUER (1989) | Cobb-Douglas production function and TFP regressions | time series 1949-85 Private Business Economy |
0.39- 0.36 0.37-0.41 Significant |
Constant returns to scale (CRS) in all inputs, including public capital input |
| MUNNELL (1990a) | Cobb-Douglas production function reproduces Aschauer | time series 1948-1987 private non- farm sector | 0.34-0.41 Significant |
CRS in all inputs; also priv. and publ. cap. coef. equal |
| MUNNELL (1990b) | Cobb-Douglas production function | cross-sect. time series 48 states 1970-1986 | 0.15 | see Munnell 1991 and other references |
| MUNNELL (1991) | Cobb-Douglas production function | cross-sect. Average 1970-1986 states values 12 high endowm. 26 mid. endowm. 10 low endowm. |
0.14 0.11 0.22 Significant |
Returns to Scale 1.01 1.03 1.04 |
| GARCIA-MILA AND McGUIRE (1988) | Cobb-Douglas production function | cross-sect. time series 14 annual obs. of 48 states gross state prod. labor, capital expenditures on education and highways | Highways: 0.045-0.044 Education: 0.16-0.072 Significant |
Returns to Scale 1.04 Cannot reject increasing returns to scale |
| EBERTS (1988) | Translog production function | cross-sect. manufacturing 1958-1978 38 Metropolitan Areas | 0.04 Significant |
CRS; public and private capital substitutes public and labor complements |
| HULTEN AND SCHWAB (1991a) | Cobb-Douglas production function with first differences. | time series 1949-1985 same as Aschauer | 0.42 Significant 0.028 Insignificant |
(-) coeff. for labor |
| TATOM (1991) | Cobb-Douglas production function including energy price, with first differences. | time series 1974-1987 Business Sect. | 0.146 Insignificant |
CRS |
| MERA (1972) | Cobb-Douglas production function | Japan pooled data of regions and time 3 sectors 4 classifications of social overhead capital |
0.22 0.20 (.50) 0.12-0.18 Significant |
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| FORD AND PORET (1991) | TFP regressions | USA and 11 OECD countries time series and country cross-section | Half of countries significant effect after 1960 Mixed support of Aschauer results |
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| HULTEN AND SCHWAB (1991b) | TFP regressions | cross section time series regional study of Snow-Sun Belt 1970-1986 Gross output value added | public capital insignif. in all regressions private capital insignif. in gross output regres. signif. in value added implying scale .88 |
Table 2: Cost or Profit Function Estimates
| DESCRIPTION | DIRECT EFFECT | INDIRECT EFFECT | |||||
| Author | Unit of Analysis |
Specification | Public Capital | Cost | Labor | Capital | Intermediate |
| BERNDT AND HANSSON (1991) | Sweden Private Sector 1960-1988 | Variable Cost Labor Requirement Function | Core Public Capital | Cost Savings Unclear | Short-run complements | ---- | ---- |
| DENO (1988) | USA 36 SMSA Manufacturing Industries 1970-78 Pooled |
Profit Truncated Translog | Highway, Water and Sewer Adjusted with the proportion of population employed by the sector | Profit increase Elasticity = .08 to .5 |
Gross complements Elasticity = 0.1 to .4 |
Gross complements Elasticity = 0.11 to .4 |
---- |
| CONRAD AND SEITZ (1992) | West Germany Manufacturing Construction, Trade and Transport 1960-1988 Time-Series | Cost Translog and MR=MC | Total Adjusted with capacity utilization rate | Cost Savings | Substitutes | Complements | Substitutes |
| KEELER AND YING (1988) | USA Trucking Industry 1960-1988 Regional Pooled | Cost Translog | Highway Stock | Cost Savings | ---- | ---- | ---- |
| LYNDE AND RICHMOND (1992) | USA Nonfinancial Corporate Business Sector 1958-1989 Time-Series | Cost Translog P = MC and CRS |
Total Federal and State | Cost Savings | Substitutes Elasticity = -.45 to -.49 |
Complements Elasticity = .71 to .90 | ---- |
| LYNDE AND RICHMOND (1993) | U.K. Manufacturing sector 1966:1 to 1992:2 value added | Cost translog | Total | Cost Savings | ---- | Substitutes | ---- |
| MORRISON AND SCHWARTZ (1991) | USA Manufacturing by State 1971-1987 Pooled by Region State specific Effects | Variable Cost Generalized Leontief P=MC | Core | Cost Savings Elasticity = -.10 to -.27 | ---- | ---- | ---- |
| DESCRIPTION | DIRECT EFFECT | INDIRECT EFFECT | |||||
| Author | Unit of Analysis |
Specification | Public Capital | Cost | Labor | Capital | Intermediate |
| NADIRI AND MAMUNEAS (1991) | USA Manufacturing 12 2-digit industries 1955-1986 Pooled Industry Specific Effects | Cost Translog CRS for Private Inputs | Total Stock Adjusted with Capacity Utilization Rate | Cost Savings Elasticity = 0 to -.21 |
Substitutes Elasticity = 0 to -1.4 |
Substitutes Elasticity = -.02 to -1.4 |
Complements Elasticity =.12 to .76 |
| SEITZ (1992a) | West Germany 31 2-digit Industries 1970-1989 Pooled Industry Specific Effects | Cost Generalized Leontief | Public Roads Length of Motorway System |
Cost Savings | Substitutes Elasticity = -.0004 |
Complements Elasticity = .03 to .04 |
---- |
| SEITZ (1992b) | West Germany 31 2-digit Industries 1970-1989 Pooled Industry Specific Effects | Cost Generalized Leontief | Total Core |
Cost Savings | Substitutes Elasticity = -.15 to -.13 |
Complements Elasticity = .34 to .86 |
---- |
| SHAH (1992) | Mexican Manufacturing Sector 26 3-digit Industries Pooled | Variable Cost Translog | Total Adjusted with industries' output proportion | Cost Savings | Complements Elasticity = -.006 |
Complements Elasticity = -.002 |
Substitutes Elasticity = .005 |
