Let us also assume that all prices at the calibration point are unity. The program operates under DOS on a PC and can be used with with cost functions programmed in Lahey Fortran, Turbo Pascal, Turbo C, or Microsoft Quick Basic. Introduction The computer program which we have developed provides a quantitative procedure for testing the global properties of functional forms. It was developed to investigate the regularity and the third-order curvature properties of a number of commonly used flexible functional forms. Values presented in Table 1 of the paper summarize results from a large number of function evaluations and a number of different of benchmark AUES configurations.
Mean results provide a general idea of performance.
Our testing procedure, however, provides a detailed representation of particular functions over the full set of benchmark elasticities. We measure the outer domain of a cost function by evaluating at points throughout the price simplex. The benchmark point lies at the center of the simplex. Moving from the center of the price simplex toward a vertex, the associated relative price is increasing while the other prices are decreasing. In the program, simplices are oriented so that good 1 is at the lower left, good 2 is at the lower right, and good 3 is at the top.