5 - The Cobb–Douglas Regression in Agricultural Economics, 1944–1965

Summary

This chapter describes the adoption of the Cobb–Douglas regression by agricultural economists over the 1940-1960 period. These economists used the regression to explore a set of long-standing questions specific to agricultural economics. As a result, their defense and development of the method and the criticisms they attracted from their colleagues, while drawing on the prewar literature surrounding the Cobb–Douglas regression, had different emphases, and controversial questions that surrounded Douglas's applications of the regression became irrelevant. The agricultural economists were also the first to estimate the Cobb–Douglas regression using data generated by individual firms, as opposed to the more highly aggregated data used by Douglas and his coauthors, and they embedded it in a probability-based statistical framework. They also developed general models for applying regression analysis to panel data, models that had a profound impact on empirical economic research. All of this contributed to the process through which the Cobb–Douglas regression came to be seen as an empirical tool potentially suited to a broad list of applications.