Hi everyone,
I’m working on estimating a European agricultural production function using the FADN micro-level database, which is structured by region and time: FADN PUBLIC DATABASE SO
The FADN (Farm Accountancy Data Network) database collects detailed microeconomic data from a representative sample of farms across EU member states. It includes individual farm-level observations, with variables covering:
- Physical farm characteristics (location, size, type)
- Economic inputs (capital, labor, land use)
- Outputs (crop/livestock production, revenue)
- Financial accounts (expenditures, subsidies, balance sheets)
The data is available by region and year, making it suitable for panel data analysis, and allows for the identification of heterogeneity across space and time.
I’m applying a two-way fixed effects model to account for both regional and time heterogeneity.
My question is: can I use the estimated elasticities of capitan labor and from this panel regression as structural parameters in my DSGE model? Specifically, is it valid to treat these empirical estimates—derived from micro data and fixed effects—as approximations of the production function parameters within a DSGE framework?
Thanks in advance!