The hinging hyperplanes: An alternative nonparametric representation of a production function.

In this paper we propose hinging hyperplanes (HHs) as a flexible nonparametric representation of concave or an S-shaped production function. We derive the HHs using expressions with focus on distinction between hinge location and bending along each hinge. argue that approximation can be estimated fixed endogenous determined partitioning input space. Assuming homothetic function allows us to separate S-shape scaling law underlying core estimation procedure where two approximations are simultaneously. A closed form expression inverse piecewise linear is proposed proved. stress known result formulation equivalent Canonical Piecewise-Linear exploit formulations for provide global representations all functional forms. simulation study evaluates performance