Microeconomic and Econometric Production Analysis
Practical information  

Study year  2016/2017 
Time 
Block 2 
Programme level  Full Degree Master 
ECTS  7,5 ECTS 
Course responsible  
 

Course content
Knowledge about production technologies and producer behavior is
important for politicians, managers, business organizations,
government administrations, financial institutions, the EU, and
other national and international organizations who desire to know
how contemplated or implemented policies and market conditions
(e.g. world market prices) can aﬀect production, prices, income,
and resource utilization in agriculture as well as in other
industries. The same knowledge is relevant for consulting single
ﬁrms that want to compare themselves with other ﬁrms and the
"best practice", whilst taking into account the
uncertainty in the data and in the results. The participants of
this course will obtain relevant qualiﬁcations in econometric
production analysis so that they can contribute to the knowledge
about production technologies and producer behavior. Knowledge
of production economical facts is also of importance in economic
consultancy for farmers and other firms.
This is an applied course that focuses on practical and empirical
applications based on microeconomic production theory. The course
will cover, for instance, following topics:
 advanced microeconomic production theory, e.g. production functions; distance functions; cost minimization and cost functions; profit maximization and profit functions; properties of these functions
 important indicators of production technologies, e.g. elasticities of scale, elasticities of substitution
 descriptive analysis of realworld production data, e.g. calculation of partial productivities and total factor productivities
 econometric estimation of production functions, distance functions, cost functions, and/or profit functions; interpretation of the estimation results
 further analysis based on estimation results, e.g. optimal firm size
 functional forms in applied production analysis such as CobbDouglas, Translog, etc.
 efficiency analysis using Stochastic Frontier Analysis (SFA); analyzing determinants of technical efficiencies
In the classroom exercises and homework assignments, the students will analyze production technologies using the free statistical software "R" and several realword production data sets (e.g. agricultural production, energy production). For students new to "R" a brief introduction to the relevant parts of "R" is given. Introductions to relevant "R" packages are given in the classroom exercises.
Learning outcome
The primary objective of the course is to provide the students
with relevant knowledge, practical skills, and competences in
empirical microeconomic production analysis so that they are able
to analyze production technologies and producer behavior with
appropriate econometric methods.
After completing the course the students should be able to:
Knowledge:
 Describe the primal and dual approaches in microeconomic production theory, e.g. production functions, distance functions, cost minimization and cost functions, profit maximization and profit functions, and important indicators of production technologies
 Describe procedures in econometric production analysis based on primal and dual approaches in microeconomic theory
 Describe approaches for efficiency analysis
 Describe the assumptions that are required to apply the various approaches
Skills:
 Use the software package "R" for statistical data analysis
 Apply econometric production and efficiency analysis using realworld data
 Interpret the results of econometric production and efficiency analysis
 Calculate and interpret important indicators of production technologies
 Choose a relevant approach for econometric production and efficiency analysis
 Evaluate approaches for econometric production and efficiency analysis
Competences:
 Use econometric production and efficiency analysis to investigate various realworld questions
 Critically evaluate the appropriateness of a specific econometric production or efficiency analysis for analyzing a specific realworld question
Recommended prerequisites
Students need knowledge and competences in basic microeconomic production theory and applied econometrics in order to successfully participate in this course. These competences can be obtained, for instance, by attending courses LOJB10259 (Mikroøkonomi), LOJF10262 (Produktionsøkonomi), and LOJK10272 (Applied Econometrics).Sign up
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Education
MSc Programme in Agricultural Economics
MSc Programme in Environmental and Natural Resource Economics
Studyboard
Study Board of Natural Resources and EnvironmentCourse type
Single subject courses (day)Teacher
Arne Henningsen, Tomasz G. CzekajDuration
1 blockSchedulegroup
Teaching and learning methods
The course is based on problembased learning, dialogue teaching, and practical and empirical exercises. Microeconomic production theory is presented in lectures. To facilitate students' learning, lectures are followed by groupbased exercises. These exercises are partly conducted in the classroom under guidance of the teacher and partly conducted as homework assignments. Most of the exercises are done on a pc.Capacity
25Language
EnglishLiterature
 Chambers, RG (1988): Applied Production Analysis  A Dual Approach, Cambridge University Press
 Lecture notes and material provided by the teacher
The literature is indicative. The exact literature will be announced at Absalon at the beginning of the course.
Workload
Category  Hours 
Lectures  36 
Theory exercises  16 
Practical exercises  36 
Project work  60 
Preparation  57 
Exam  1 
English  206 
Exam
Type of assessment
Aid
Only certain aids allowedStudents will get their solution to the selected homework assignment, no other aid allowed.
Marking scale
7point grading scaleCriteria for exam assessment
The participants will get the grade "12" if they have fully achieved the intended learning outcome.
Censorship form
No external censorshipReexam
As ordinary exam
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