Advanced Search
MyIDEAS: Login

Cross Section Translog Production and Elasticity of Substitution in U.S. Manufacturing Industry

Contents:

Author Info

  • Sooriyakumar Krishnapillai

    (Department of Agricultural Economics and Rural sociology, Auburn University, U.S.A.)

  • Henry Thompson

    (Department of Agricultural Economics and Rural Sociology, Auburn University, U.S.A.)

Abstract

This paper examines elasticity of substitution among electricity, labor and capital in U.S. manufacturing industry, using cross section data of 2007. In this analysis, Manufacturing industries were categorized into three categories based on input use and technology. Translog homothetic and non-homothetic production functions for each category were estimated but the restrictions imposed for homothetic production were rejected. The estimated parameters of non homothetic production function were used to estimate the own, cross price and Morishma elasticities of inputs for three different manufacturing categories. These elasticities indicate that capital, electricity and labor are substitutes each other. Cross price elasticities indicate that that electricity is weak substitute to capital and labor but capital and labor are strong substitutes to electricity. These elasticities and the availability of nonrenewable energy source suggest that price of electricity or energy will rise faster than wage and interest rate increase with economic growth. This implies that policies promoting the development and commercialization of alternative energy sources would be a better solution than policies promoting new energy saving physical capital or increasing labor productivity to meet the increasing demand for electricity.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.econjournals.com/index.php/ijeep/article/download/123/99
Download Restriction: no

File URL: http://www.econjournals.com/index.php/ijeep/article/view/123/99
Download Restriction: no

Bibliographic Info

Article provided by Econjournals in its journal International Journal of Energy Economics and Policy.

Volume (Year): 2 (2012)
Issue (Month): 2 ()
Pages: 50-54

as in new window
Handle: RePEc:eco:journ2:2012-02-1

Contact details of provider:
Web page: http://www.econjournals.com

Related research

Keywords: Elasticity of substitution; Manufacturing industries; Translog production function;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Apostolakis, Bobby E., 1990. "Energy--capital substitutability/ complementarity : The dichotomy," Energy Economics, Elsevier, vol. 12(1), pages 48-58, January.
  2. Halvorsen, Robert, 1977. "Energy Substitution in U.S. Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 59(4), pages 381-88, November.
  3. Sang V. Nguyen & Stephen H. Andrews, 1989. "The Effect of Energy Aggregation on Energy Elasticities: Some Evidence from U.S. Manufacturing Data," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 149-156.
  4. Humphrey, David Burras & Moroney, John R, 1975. "Substitution among Capital, Labor, and Natural Resource Products in American Manufacturing," Journal of Political Economy, University of Chicago Press, vol. 83(1), pages 57-82, February.
  5. Griffin, James M & Gregory, Paul R, 1976. "An Intercountry Translog Model of Energy Substitution Responses," American Economic Review, American Economic Association, vol. 66(5), pages 845-57, December.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Md. Shakil Ahmed & Mohammed Ziaul Haider, 2013. "Efficient Utilization of Resources in Manufacturing Firms," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 3(7), pages 821-835, July.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eco:journ2:2012-02-1. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ilhan Ozturk).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.