Selection Production Function and Estimate Important Coefficient of Energy in Agricultural Sector

In this investigation the selection effect of production function form on estimated values of structural parameter and importance of accuracy in proper selection of function for prevent of incorrect presumptions of empirical studies result was showed. There fore, for estimation of production function of agricultural sector, was estimated. Cobb Douglas, transcendental and translog functional forms. Then by use of standards and examines of econometrics, compare of production function and superior production function carried out. One of importance inputs that ignore to it, in production function can create importance skewed in estimation of function parameters, is the energy input. In this study the effect of energy input, along with capital and labor inputs, in time period of (1974-2006) survived and examination. Resulted showed that Cobb Douglas function in comparison with other function, is the proper function for estimation of production function of agricultural sector. Production elasticity of all inputs is between zero and one, which represent the optimum consumption of these inputs. Also, in agricultural sector exist the long-term relationship between production and labor, capital and energy inputs. Energy input coefficient such as other coefficient is significant statically, and has the importance effect on production of agricultural sector.

JEL Classification: Q3, Q43, C01, E23