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A note on Allen-Uzawa partial elasticities of substitution: the case of the translog cost function

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Atanas Christev
Allen Featherstone

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Abstract

This note provides a useful property of the Allen-Uzawa partials for the translog cost function. It also suggests how the main results extend to any functional form with certain properties. The curvature of the Allen-Uzawa matrix is the same as the curvature of the Hessian matrix. Intuitively and empirically, the Allen-Uzawa partials allow for the verification of curvature properties.

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Article provided by Taylor and Francis Journals in its journal Applied Economics Letters.

Volume (Year): 16 (2009)
Issue (Month): 11 ()
Pages: 1165-1169
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Handle: RePEc:taf:apeclt:v:16:y:2009:i:11:p:1165-1169

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  1. Diewert, Walter E & Wales, Terence J, 1987. "Flexible Functional Forms and Global Curvature Conditions," Econometrica, Econometric Society, vol. 55(1), pages 43-68, January. [Downloadable!] (restricted)
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  2. Ryan, David L & Wales, Terence J, 1998. "A Simple Method for Imposing Local Curvature in Some Flexible Consumer-Demand Systems," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(3), pages 331-38, July.
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  3. 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. [Downloadable!] (restricted)
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This page was last updated on 2009-12-5.

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