ESTIMATION OF A PRODUCTION FUNCTION FOR PHILIPPINE RETAIL STORES

Abstract

The purpose of this paper is the estimation of a production function for retail stores in the
Philippines. A generalized Cobb-Douglas production function is utilized for this purpose. Ordinary
Least Squares is used in obtaining the coefficients for labor and capital. The results show that the
marginal product of labor to be higher than the marginal product of capital and the hypothesis of
constant returns to scale is not rejected.