Cobb-douglas function or translog function? Empirical research in Vietnam

Abstract

In economics and econometrics, the Cobb-Douglas production function and the Translog function are used to represent the technical relationship between the quantities of two or more inputs and the quantities of outputs. Yet, according to the review of previous studies, most of them use the Cobb-Douglas function; there are also some studies that use the Translog function or both functions in one study. But, the comparison of analytical results of these two types of functions has hardly been mentioned.

This paper uses input statistics on Vietnam’s GDP from 2009 to 2019, performing analysis using both Cobb-Douglas and Translog functions. The study results showed that from the comparison of the standard deviation, the comparison between the graph of predicted values with the graph of real value and Mean Absolute Error (MAE), Mean Abs. Percent error (MASE), Root Mean Squared Error (RMSE), Theil inequality coefficient (Theil) all show the forecast results using the Translog function for more reliable results than the forecast using the Cobb-Douglass function.