Materials, Capital, Direct/Indirect Substitution and Mass Balance Production Functions
AbstractA foundation is provided for a correct and accurate analysis of the relationship between monetary values and physical dimensions in economic production. A distinction is proposed between direct and indirect substitution. Linked to this, a classification is offered of various types of substitutability and complementarity relationships between production factors. It is argued that the neoclassical production function may be consistent with mass balance, but is unsuitable for a detailed and accurate understanding of changes in production that influence materials use. For this purpose, general production functions satisfying mass balance are formulated, drawing upon the proposed classifications. This discussion paper has resulted in a publication in Land Economics , 1999, 75(4), 547-561.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 98-065/3.
Date of creation: 10 Jun 1998
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Production; Production functions; Substitution; Economics; Recycling; Economic models; Functions; Demand;
Other versions of this item:
- Jeroen C. J. M. van den Bergh, 1999. "Materials, Capital, Direct/Indirect Substitution, and Mass Balance Production Functions," Land Economics, University of Wisconsin Press, vol. 75(4), pages 547-561.
- Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
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