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Cost and Production Duality with Time Utilization of Capital

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  • Christopher C. Klein

Abstract

This article fills in some notable gaps in the literature on the existence and empirical implementation of dual cost and production models embodying the time utilization of capital. A proof of the existence of such dual cost and production functions is provided; previous results of Betancourt (1986) and Klein (1984) are extended to the general N-input-factor, continuously variable time-utilization case; and the restrictive conditions under which a conventional neoclassical empirical cost model captures the characteristics of a capital-utilization technology are derived. The general specification of cost functions that capture utilization effects is indicated.

Suggested Citation

  • Christopher C. Klein, 2007. "Cost and Production Duality with Time Utilization of Capital," Working Papers 200704, Middle Tennessee State University, Department of Economics and Finance.
    • Handle: RePEc:mts:wpaper:200704
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    File URL: http://capone.mtsu.edu/berc/working/Klein2007a.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    duality; capital utilization; time in production.;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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