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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.
The Cobb-Douglas regression, a statistical technique developed to estimate what economists called a 'production function', was introduced in the late 1920s. For several years, only economist Paul Douglas and a few collaborators used the technique, while vigorously defending it against numerous critics. By the 1950s, however, several economists beyond Douglas's circle were using the technique, and by the 1970s, Douglas's regression, and more sophisticated procedures inspired by it, had become standard parts of the empirical economist's toolkit. This volume is the story of the Cobb-Douglas regression from its introduction to its acceptance as general-purpose research tool. The story intersects with the histories of several important empirical research programs in twentieth century economics, and vividly portrays the challenges of empirical economic research during that era. Fundamentally, this work represents a case study of how a controversial, innovative research tool comes to be widely accepted by a community of scholars.
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