Definition of Meta-Production Function: Meta-production function means best-practice production function -- depending on context, either the most efficient feasible practice, or most efficient actual practice of the existing entities converting inputs X into output y. Often in practice y is an agricultural output, and data from a sample of farms, and the meta-production function could be estimated by estimating production functions for the farms and choosing among the most efficient ones. In the (macro) context of the quote below, the entities are not farms but countries, producing GDP.

"The term 'meta-production function' is due to Hayami and Ruttan (1970, 1985). For an exposition of the meta-production function approach, see Lau and Yotopoulos (1989) and Boskin and Lau (1990).... The two most important maintained hypotheses [of this approach] are: (1) that the aggregate production functions of all countries are identical in terms of 'efficiency-equivalent' units of output and inputs; and (2) that technical progress in all countries can be represented in the commodity-augmentation form, with constant geometric augmentation factors...." The framework allows "the researcher to consider and potentially to reject the maintained hypotheses of traditional growth accounting [such as] (1) constant returns to scale, (2) neutrality of technical progress; and (3) profit maximization." (p66) An assumption related to the second maintained hypothesis above, which the theory depends on (p69) is that "the measured outputs and inputs of the different countries may be converted into unobservable standardized, or 'efficiency-equivalent,' quantities of output and inputs by multiplicative country- and output- and input-specific time-varying augmentation factors...." (where "time-varying" seems to conflict with the requirement, above, that the augmentation factors be "constant".) (p69) In this approach "countries may differ in the quantities of their factor inputs and intensities and possibly in the qualities and efficiencies of their inputs and outputs, but they do not differ with regard to the technological opportunities .... [T]hey are assumed to have equal access to technologies." From p66, 69, 73 of Lau (1996). (Econterms)

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