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Estimate of the elasticities of substitution of the CES and translog production functions in Tunisia

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  • Kamel Helali
  • Maha Kalai

Abstract

On the basis of the CES and translog production functions, this study compares the degrees of capital-labour substitution of a developing country. In order to change the tradition of some modellers, we try to present estimates of substitution elasticity caused by these two production functions applied to the Tunisian economy. In these estimations, we use statistical data about the 1961/2010 period for the five sectors of the global economy by choosing two factors of production. We apply the nonlinear least squares method to estimate the substitution elasticity in each sector of the CES function using the GAMS software and the SURE method in order to estimate the translog function by means of the STATA software. The results indicate a strong similitude between the elasticity substitution estimates for each function, which are significantly below the unity.

Suggested Citation

  • Kamel Helali & Maha Kalai, 2015. "Estimate of the elasticities of substitution of the CES and translog production functions in Tunisia," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 9(3), pages 245-253.
    • Handle: RePEc:ids:ijecbr:v:9:y:2015:i:3:p:245-253
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    Cited by:

    1. Gertrude Sebunya Muwanga, 2017. "Estimation Of Cob-Douglas And Translog Production Functions With Capital And Gender Disaggregated Labor Inputs In The Usa," Journal of Smart Economic Growth, , vol. 2(3), pages 55-105, December.
    2. Kamel Helali & Maha Kalai, 2015. "Technical Efficiency Determinants Of The Tunisian Manufacturing Industry: Stochastic Production Frontiers Estimates On Panel Data," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 40(2), pages 105-130, June.
    3. Máximo A. Domínguez-Garabitos & Víctor S. Ocaña-Guevara & Félix Santos-García & Adriana Arango-Manrique & Miguel Aybar-Mejía, 2022. "A Methodological Proposal for Implementing Demand-Shifting Strategies in the Wholesale Electricity Market," Energies, MDPI, vol. 15(4), pages 1-28, February.

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