Abstract: By means of total differential analysis method, it is pointed out the formerly proposed method of modifying Cobb-Douglas production function by adding natural productivity decreasing rate and cost increasing rate has an unrealistic supposition, that is, it implies that resource stock of oilfield impacts output through weakening of technology progress. According to typical production structure of oilfield, the authors of the paper propose a timevarying translog stochastic frontier production function of oilfields with three inputs of resource stock, capital, and labor. The function is applied empirically by using the data collected from 15 oilfields in China with time span of 1995—2003. Estimation results show that the coefficient of square term of resource stock input is significantly positive, which means resource stock input has an increasing impact on the oilfields output. By comparison, the efficacy of the tranlog function specification can be confirmed; it can capture the characteristics of an oilfield production better with two prominent features, that is, reflecting impacts of resource stock correctly and revealing impacts of technology progress profoundly.

Key words: translog stochastic production function, technological progress, technology efficiency, natural productivity decreasing rate, oilfield production