IDEAS home Printed from https://ideas.repec.org/a/kap/jproda/v24y2005i2p183-196.html
   My bibliography  Save this article

Elasticities of Substitution and Complementarity: A Synthesis

Author

Listed:
  • Paolo Bertoletti

    ()

Abstract

We derive the relationships between the net and gross elasticities of substitution and complementarity (i.e., the elasticities that refer either to the conditional or unconditional, direct or inverse demand system) in the general case of non-homothetic, variable-returns-to-scale technologies. We also show that the so-called Hicks Elasticity of Complementarity (Hicks, Oxford economic Papers 22, 289–296 (1970)) is dual to a full-fledged elasticity of gross input substitution that we call the Hotelling/Lau Elasticity of Substitution (Lau, Production Economics: A Dual Approach to Theory and Applications. Amsterdam: North-Holand (1978)). The former is, in fact, the proper elasticity of substitution in the case of the inverse, unconditional input demand. Our results should clarify some issues about the input substitutability classification. Copyright Springer Science+Business Media, Inc. 2005

Suggested Citation

  • Paolo Bertoletti, 2005. "Elasticities of Substitution and Complementarity: A Synthesis," Journal of Productivity Analysis, Springer, vol. 24(2), pages 183-196, October.
  • Handle: RePEc:kap:jproda:v:24:y:2005:i:2:p:183-196
    DOI: 10.1007/s11123-005-4703-3
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11123-005-4703-3
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Charles Blackorby & Daniel Primont & R. Russell, 2007. "The Morishima gross elasticity of substitution," Journal of Productivity Analysis, Springer, vol. 28(3), pages 203-208, December.
    2. Paolo Bertoletti, 2016. "A Note on Consumer Surplus and the Structure of Preferences," DEM Working Papers Series 130, University of Pavia, Department of Economics and Management.
    3. A. Mantovi, 2013. "On the geometry of luxury," Economics Department Working Papers 2013-EP02, Department of Economics, Parma University (Italy).
    4. Paolo Bertoletti & Giorgio Rampa, 2011. "On Marginal Returns and Inferior Inputs," Quaderni di Dipartimento 145, University of Pavia, Department of Economics and Quantitative Methods.
    5. Paolo Bertoletti & Giorgio Rampa, 2013. "On inferior inputs and marginal returns," Journal of Economics, Springer, vol. 109(3), pages 303-313, July.
    6. Elena Burmistrova & Sergey Lobanov, 2018. "The Allen--Uzawa elasticity of substitution for nonhomogeneous production functions," Papers 1802.06885, arXiv.org.
    7. David Stern, 2011. "Elasticities of substitution and complementarity," Journal of Productivity Analysis, Springer, vol. 36(1), pages 79-89, August.
    8. Bas Jacobs & A. Lans Bovenberg, 2011. "Optimal Taxation of Human Capital and the Earnings Function," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(6), pages 957-971, December.
    9. Stefan Baumgaertner & Moritz A. Drupp & Martin F. Quaas, 2013. "Subsistence and substitutability in consumer preferences," Working Paper Series in Economics 290, University of Lüneburg, Institute of Economics.
    10. repec:kap:enreec:v:67:y:2017:i:1:d:10.1007_s10640-015-9976-z is not listed on IDEAS

    More about this item

    Keywords

    elasticity of substitution and complementarity; inverse demand; returns to scale; homotheticity; D11; D24; D33;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jproda:v:24:y:2005:i:2:p:183-196. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.