Production theory and Zonotopes: accounting for firm heterogeneity and technical change.

Simona Settepanella - Hokkaido University, Sapporo, Japan
Date and time
Thursday, March 5, 2015 at 11:00 AM - Aula H
Programme Director
Giandomenico Orlandi
External reference
Publication date
March 5, 2015
Computer Science  


 In this talk we will present a new framework to assess firm level  heterogeneity and to study the rate and direction of  technical  change. Building on the analysis of revealed short-run production  functions by Hildenbrand in 1981, we propose the (normalized)  volume of the zonotope composed by vectors-firms in a narrowly  defined industry as an indicator of inter-firm heterogeneity. Moreover, the angles that the main diagonal of the zonotope form with the axes provides a measure of the rates and directions of technical change over time. The proposed framework can easily account for n-inputs and m-outputs and, crucially, the measures of heterogeneity and technical change do not require many of the standard assumptions from production theory. 


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