Applied Economics Education & Extension

an AAEA Journal

Agricultural and Applied Economics Association

Cobb–Douglas Production Functions: Bringing Theory and Statistics Together in the Intermediate Micro/Macro Classroom

Mark L. Burkey(a)
(a)North Carolina A&T State University

JEL Codes: B23, A20, C51
Keywords: Cobb–Douglas function, R programming, regression

First Published Online: June 12, 2026

View Full Article (PDF) | Request Teaching Notes/Supplemental Materials

Abstract

The Cobb–Douglas production function is a staple of economics education, yet students rarely learn about its origins or empirical roots. While undergraduate courses typically focus on its analytical properties, it is important to highlight that Cobb and Douglas’s key contribution was empirical: They estimated the function’s parameters using data. As many economics programs increasingly emphasize empirical modeling in response to the data analytics boom, connecting theory with data is more important than ever. This resource supports instructors of Intermediate Microeconomics and Macroeconomics in contextualizing the Cobb–Douglas function—its historical development, theoretical features, and empirical estimation. We briefly explore why economists were interested in such a function more than a century ago, clarify the contributions of Cobb and Douglas (and others), and illustrate how they estimated the parameters with their data. To help bring this history into the classroom, we provide annotated R code that enables faculty and students to access Cobb and Douglas’s original data through R or RStudio Cloud. The code includes tools for estimating the function’s coefficients, generating visualizations, and conducting specification and robustness checks. By integrating historical insight with modern data tools, this resource helps bridge the gap between economic theory and empirical practice.

About the Authors: Mark L. Burkey (burkeym@ncat.edu) is a professor with the Department of Economics at North Carolina A&T State University. Acknowledgments: Thanks to Scott Simkins, Stephanie Kelly, and members of the Aggie Economics Association student organization for helpful feedback.

Copyright is governed under Creative Commons CC BY-NC-SA

References

Abel, A.B., B.S. Bernanke, and D. Croushore. 2024. Macroeconomics, 11th ed. Pearson.

Biddle, J. 2011. “The Introduction of the Cobb-Douglas Regression and Its Adoption by Agricultural Economists.” History of Political Economy 43:235–257. https://doi.org/10.1215/00182702-1158745

———. 2012. “Retrospectives: The Introduction of the Cobb-Douglas Regression.” Journal of Economic Perspectives 26(2):223–236. https://doi.org/10.1257/jep.26.2.223

Binswanger, H.P. 1974. “The Measurement of Technical Change Biases with Many Factors of Production.” American Economic Review 64:964–976.

Bodnár, K., and M. Mohr. 2023. “The Development of the Wage Share in the Euro Area Since the Start of the Pandemic,” ECB Economic Bulletin 8:71–75.

Cobb, C.W., and P.H. Douglas. 1928. “Theory of Production.” American Economic Review: Papers and Proceedings 18:139–165. https://doi.org/10.2307/1811556

Dixon, R. 2006. “The Solow-Swan Model.” In D. Clark, ed. The Elgar Companion to Development Studies, Edward Elgar, pp. 573–579. https://doi.org/10.4337/9781847202864.00125

Douglas, P.H. 1948. “Are There Laws of Production?” American Economic Review 38:1–41. https://doi.org/10.2307/1801936

Goldberger, A.S. 1968. “The Interpretation and Estimation of Cobb-Douglas Functions.” Econometrica 36:464–472. https://doi.org/10.2307/1909517

Griffin, R.C., J.M. Montgomery, and M.E. Rister. 1987. “Selecting Functional Form in Production Function Analysis.” Western Journal of Agricultural Economics 12:216–227.  https://doi.org/10.22004/ag.econ.32240

Griliches, Z. 1957. “Specification Bias in Production Function Estimation.” Journal of Farm Economics 39:8–20. https://doi.org/10.2307/1233881

Havik, K., K. McMorrow, F. Orlandi, C. Planas, R. Raciborski, W. Roeger, et al. 2014. “The Production Function Methodology for Calculating Potential Growth Rates and Output Gaps.” European Economy: Economic Papers No. 535. Directorate-General for Economic and Financial Affairs, European Commission.

Hayami, Y., and V.W. Ruttan. 1970. “Agricultural Productivity Differences Among Countries.” American Economic Review 60:895–911.

Houpt, S. 2013. “Productivity and Transition in Swedish Iron and Steel, 1870–1940.” Scandinavian Economic History Review 61(1):34–59. https://doi.org/10.1080/03585522.2012.748690

Kaldor, N. 1957. “A Model of Economic Growth.” Economic Journal 67:591–624. https://doi.org/10.2307/2227704

Karabarbounis, L. 2024. “Perspectives on the Labor Share.” Journal of Economic Perspectives 38(2):107–136. https://doi.org/10.1257/jep.38.2.107

Kennedy, P. 1983. “Practitioner’s Corner: Logarithmic Dependent Variables and Prediction Bias.” Oxford Bulletin of Economics and Statistics 45:389–392. https://doi.org/10.1111/j.1468-0084.1983.mp45004006.x

Keynes, J. M. 1939. “Relative Movements of Real Wages and Output.” Economic Journal 49: 34–49. https://doi.org/10.2307/2225182

Lau, L.J., and P.A. Yotopoulos. 1971. “A Test for Relative Efficiency and Application to Indian Agriculture.” American Economic Review 61:94–109.

Liu, T. 2021. “Measuring Cost Inefficiency: A Dual Approach.” Economic Modelling 99:105471. https://doi.org/10.1016/j.econmod.2021.02.012

Lloyd, P. J. 2001. “The Origins of the von Thünen-Mill-Pareto-Wicksell-Cobb-Douglas Function.” History of Political Economy 33:1–19. https://doi.org/10.1215/00182702-33-1-1

Mas-Colell, A., M.D. Whinston, and J. Green. 1995. Microeconomic Theory. Oxford University Press.

Mendershausen, H. 1938. “On the Significance of Professor Douglas’ Production Function.” Econometrica 6:143–153. https://doi.org/10.2307/1907145

Mundlak, Y. 2001. “Production and Supply.” In B. Gardner and G. Rausser, eds. Handbook of Agricultural Economics, vol. 1A, Elsevier, pp. 3–85. https://doi.org/10.1016/S1574-0072(01)10004-6

NBER National Bureau of Economic Research. n.d. “U.S. Business Cycle Expansions and Contractions.” Available online: https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions [Accessed December 20, 2024]

Olsson, C.-A. 1971. “The Cobb–Douglas or the Wicksell Function?” Economy and History 14(1):64–69. https://doi.org/10.1080/00708852.1971.10418884

Phelps Brown, E.H., and P.E. Hart. 1952. “The Share of Wages in National Income.” Economic Journal 62(246):253–277. https://doi.org/10.2307/2227003

Sandelin, B. 1976. “On the Origin of the Cobb-Douglas Production Function.” Economy and History 19(2)117–123. https://doi.org/10.1080/00708852.1976.10418933

Silberberg, E., and W. Suen. 2000. The Structure of Economics: A Mathematical Analysis. McGraw-Hill.

Solow, R.M. 1956. “A Contribution to the Theory of Economic Growth.” Quarterly Journal of Economics 70(1):65–94. https://doi.org/10.2307/1884513

———. 1958. “A Skeptical Note on the Constancy of Relative Shares.” American Economic Review 48:618–631.

Stigler, G. 1941. Production and Distribution Theories. Macmillan.

Swan, T.W. 1956. “Economic Growth and Capital Accumulation.” Economic Record 32:334–361. https://doi.org/10.1111/j.1475-4932.1956.tb00434.x

Wicksell, K. 1896. Finanztheoretische Untersuchungen Nebst Darstellung und Kritik des Steuerwesens Schwedens. Verlag von Gustav Fischer.

———. 1893. Über Wert, Kapital und Rente Nach den Neueren Nationalökonomischen Theorien. Verlag von Gustav Fischer.

Wicksteed, P.H. 1894. An Essay on the Co-Ordination of the Laws of Distribution. Macmillan.

Woolway, M.D. 1997. “Using an Empirically Estimated Production Function for Major League Baseball to Examine Worker Disincentives Associated with Multi-Year Contracts.” American Economist 41:77–83. https://doi.org/10.1177/056943459704100210

Articles in this issue

The Cost of Capital of Walmart, Kroger, Albertsons, Costco, and Publix in 2025
Carlos J.O. Trejo-Pech

Cobb–Douglas Production Functions: Bringing Theory and Statistics Together in the Intermediate Micro/Macro Classroom
Mark L. Burkey

Evolving Curriculum to Prepare Students to Solve Problems That Don’t Yet Exist: The Application of Horizon-Scanning
Joe Parcell(a)

Strengthening Macroeconomics Training to Prepare Agribusiness Students for a Changing Economic Landscape
Gulcan Onel, Jennifer Clark, Caleb Stair, Jared Gars, and James Seale Jr.

Avoid Falling from the Enrollment Cliff: Finding Treasures from Rural Areas May Be a Solution for Some Universities
Kuan-Ming Huang and Joshua G. Maples

Skills and Capabilities Needed for Agribusiness Graduates
Ifeloluwa R. Odiase , Aaron J Johnson, W. Scott Downey , and Rodney B. Holcomb

Technical Skills and Their Roles in Agribusiness Supply Chain Management Education
Ryan Loy, Logan L. Britton, and F. Bailey Norwood

Juggling Students and Industry Needs: Redesigning an Academic Agribusiness Program
Serhat Asci, Todd Lone, and Pei Xu

Re-engaging Traditional Students and Attracting New Talent to Agricultural and Applied Economics Curricula and Agribusiness Careers
English Ratliff, Sierra Howry, Kenrett Jefferson Moore, Jerrod Penn, Mohammed Ibrahim, et.al

Designing a Farm and Ranch Management Plan: A Teaching Template
Nicole Karwowski and Beth Shirley

Seven Editions of Pedagogical Innovation: Insights for Developing an Agribusiness Management Curriculum for the Twenty-First Century
Jay Akridge, Freddie L. Barnard, Brady E. Brewer, W. David Downey, John C. Foltz, Trey Malone

A Transdisciplinary Approach to Undergraduate Sustainability Education: Resource Economics by Way of Business and Science
Anna A. Klis and Laura Jackson Young

International Food Safety Regulations in the Almond Industry: Insights, Regulations, and Strategies
Mina Hejazi, Jeta Rudi-Polloshka, Karla Ahumada, and Amanda Lathrop

Simulating Farm-Level Decision-Making in Smallholder Farming: The Green Revolution Game as an Experiential Tool for Teaching Agricultural and Development Economics
Stephen C. Mukembo and Kelly R. Wilson

Simulating Store Management and Competition in Food Retailing
Richard Volpe and Jeremiah Danley

Introducing Concepts Through Games in the Economics Classroom
Anthony R. Delmond, Joey E. Mehlhorn, and R. Shawn Nanney

SideQuest: How a Custom-Built Gamification Platform Can Improve Student Learning and Socialization
Chris Finaret and Jesse Cirimel

Teaching Approaches to Ethical Generative Artificial Intelligence Use in Agricultural Economics Classrooms
Bailey Peterson-Wilhelm, Merri E. Day, Priyanka Sharma, Jiyeon Kim, Lonnie Hobbs Jr.,. et.al

A Commentary on Extension Programming: An Overview of the Extension Program Related to Genetic Selection and Profitability on Dairy Farms
Rebecca L. Weir , Joleen C. Hadrich