Econometrica

Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Jul, 1968, Volume 36, Issue 3

The Interpretation and Estimation of Cobb-Douglas Functions

https://www.jstor.org/stable/1909517
p. 464-472

Arthur S. Goldberger

For empirical implementation of the Cobb-Douglas function, it is customary to append a multiplicative lognormal disturbance and fit a linear regression in the logarithmic variables. When this is done, attention is shifted (apparently unwittingly) to the conditional median from the conditional mean which is ordinarily the prime target of study. The customary procedure may be modified to provide minimum variance unbiased estimation of the conditional median or conditional mean.


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