A Note on the Two-Input Arc Elasticity of Substitution
AbstractThis note suggests a measure for the two-input arc elasticity of substitution that comes up naturally and preserves the salient characteristic of the Hicks-Robinson original concept. In particular, (i) it gives the average value of point substitution elasticities over the logarithmic arc of the input price ratio, and leads therefore to the exact estimation of the CES production function family, and (ii) its relationships with the discrete change in factor shares are formally parallel to those well known for the point elasticity assumption.
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Bibliographic InfoArticle provided by El Colegio de México, Centro de Estudios Económicos in its journal Estudios Económicos.
Volume (Year): 23 (2008)
Issue (Month): 2 ()
arc elasticity; substitution elasticity;
Find related papers by JEL classification:
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- D33 - Microeconomics - - Distribution - - - Factor Income Distribution
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.:
- Bigman, David, 1978. "Derived Demand and Distributive Shares in a Multifactor Multisector Model," American Economic Review, American Economic Association, vol. 68(5), pages 923-28, December.
- M. Bronfenbrenner, 1960. "A Note on Relative Shares and the Elasticity of Substitution," Journal of Political Economy, University of Chicago Press, vol. 68, pages 284.
- Samuelson, Paul A, 1973. "Relative Shares and Elasticities Simplified: Comment," American Economic Review, American Economic Association, vol. 63(4), pages 770-71, September.
- Anderson, R. K. & Moroney, J. R., 1993. "Morishima elasticities of substitution with nested production functions," Economics Letters, Elsevier, vol. 42(2-3), pages 159-166.
- Blackorby, Charles & Russell, R Robert, 1989. "Will the Real Elasticity of Substitution Please Stand Up? (A Comparison of the Allen/Uzawa and Morishima Elasticities)," American Economic Review, American Economic Association, vol. 79(4), pages 882-88, September.
- Diewert, W Erwin, 1978. "Superlative Index Numbers and Consistency in Aggregation," Econometrica, Econometric Society, vol. 46(4), pages 883-900, July.
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