2003-02 EC: Comparing the Regularity, Flexibility and Applied Properties of Bernstein and AIM Seminonparametric Models (Working Paper)
Chak, P.M., Madras, N., & Smith, J.B.
published: 2003 | Research publication | Working Paper - Economics
ABSTRACT This paper presents an empirical comparison of two seminonparametric models: the Asymptotically Ideal Model (AIM) and the Bernstein model, in terms of their ability to approximate and estimate unknown technologies. With desirable asymptotic properties, low order Bernstein models are shown to provide excellent approximations and essentially unbiased estimates. Moreover, they are regular throughout the domain over which they are de ned. On the other hand, low order unconstrained AIM models perform quite well, but may not satisfy the economic regularity conditions over the entire domain. While constrained AIM models do not have regularity problems, they can only provide good estimates for technologies with restrictive properties. As well, little is known about their asymptotic properties.
Keywords and Phrases: exible functional forms, Bernstein polynomials, seminonparametric models, cost functions.
JEL Classification: C13, C14, C15, C30, C52.
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