  The purpose of this study is to estimate the production function and examine
the structure of production in the mining sector of Iran. Several studies have
already been conducted in estimating production functions of various economic
sectors; however, less attention has been paid to mining sectors. After
examining the stationarity of variables using augmented Dickey-Fuller and
Phillips-Perron tests, this study estimated the production function of the
mining sector of Iran under different scenarios using the co-integration method
and time-series data for 1976-2006. The unconstrained Cobb-Douglas production
function in Tinbergen form provided better results in terms of theoretical
foundations of economics, statistics, and econometrics. These results show that
the structure of the mining sector of Iran is both capital-intensive and
labour-intensive. Based on the findings of this study, the elasticity of
production with respect to capital and labour have been 0.44 and 0.41,
respectively. In addition, the coefficient of time variable, as an indicator of
technological progress in the production process, is statistically significant
representing a positive effect of technological changes on the output of Iran's
mining sector.
