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A Production Function with an Inferior Input: Comment

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  • Christian E. Weber

Abstract

Epstein and Spiegel (The Manchester School, Vol. 68 (2000), No. 5, pp. 503–515) have discussed a production function in which one input is inferior: an increase in the target level of output reduces the quantity of the input demanded. This paper provides a more straightforward proof that the input in question is inferior. This proof has the added advantage that, unlike the proof of Epstein and Spiegel, it is based on the firm’s cost minimization problem. It thus emphasizes the connection between the firm’s cost minimization problem and the issue of input inferiority. It is also shown that, if we treat the Epstein–Spiegel functional form as a utility function rather than a production function, then the inferior good can exhibit Giffen behavior.

Suggested Citation

  • Christian E. Weber, 2001. "A Production Function with an Inferior Input: Comment," Manchester School, University of Manchester, vol. 69(6), pages 616-622, December.
    • Handle: RePEc:bla:manchs:v:69:y:2001:i:6:p:616-622
    DOI: 10.1111/1467-9957.00273
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    Cited by:

    1. Kris De Jaegher, 2008. "Benchmark Two‐Good Utility Functions," Manchester School, University of Manchester, vol. 76(1), pages 44-65, January.
    2. Paolo Bertoletti & Giorgio Rampa, 2011. "On Marginal Returns and Inferior Inputs," Quaderni di Dipartimento 145, University of Pavia, Department of Economics and Quantitative Methods.
    3. Sproule, Robert & Karras, Michael, 2022. "In Search of A Giffen Input: A Comprehensive Analysis of The Wold-Juréen (1953) Production Function," MPRA Paper 113007, University Library of Munich, Germany.
    4. Moffatt, Peter G., 2002. "Is Giffen behaviour compatible with the axioms of consumer theory?," Journal of Mathematical Economics, Elsevier, vol. 37(4), pages 259-267, July.
    5. Paolo Bertoletti & Giorgio Rampa, 2013. "On inferior inputs and marginal returns," Journal of Economics, Springer, vol. 109(3), pages 303-313, July.

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