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An Atemporal Microeconomic Theory and an Empirical Test of Price-Induced Technical Progress

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  • Michael Caputo
  • Quirino Paris

Abstract

An exhaustive comparative statics analysis of a general price taking cost-minimizing model of the firm operating under the influence of price-induced technical progress is carried out from a dual vista. The resulting refutable implications are observable and thus amenable to empirical verification, and take on the form of a symmetric and negative semidefinite matrix. Using data from individual cotton gins in California’s San Joaquin Valley, we empirically test the complete set of implications of the price-induced technical progress theory using both classical and Bayesian statistical procedures. We find that the data are fully consistent with the atemporal, cost-minimizing, price-induced microeconomic theory of technical progress. Copyright Springer Science+Business Media, Inc. 2005

Suggested Citation

  • Michael Caputo & Quirino Paris, 2005. "An Atemporal Microeconomic Theory and an Empirical Test of Price-Induced Technical Progress," Journal of Productivity Analysis, Springer, vol. 24(3), pages 259-281, November.
    • Handle: RePEc:kap:jproda:v:24:y:2005:i:3:p:259-281
    DOI: 10.1007/s11123-005-4934-3
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    12. McFadden, Daniel, 1978. "Cost, Revenue, and Profit Functions," Histoy of Economic Thought Chapters, in: Fuss, Melvyn & McFadden, Daniel (ed.),Production Economics: A Dual Approach to Theory and Applications, volume 1, chapter 1, McMaster University Archive for the History of Economic Thought.
    13. Hirsch, Werner Z, 1969. "Technological Progress and Microeconomic Theory," American Economic Review, American Economic Association, vol. 59(2), pages 36-43, May.
    14. Paris, Quirino & Caputo, Michael R., 2001. "Comparative Statics Of Money-Goods Specifications Of The Utility Function," Working Papers 11953, University of California, Davis, Department of Agricultural and Resource Economics.
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    Cited by:

    1. Belton M. Fleisher & William H. McGuire & Xiaojun Wang & Min Qiang Zhao, 2021. "Induced innovation: evidence from China’s secondary industry," Applied Economics, Taylor & Francis Journals, vol. 53(52), pages 6075-6093, November.
    2. Esposti, Roberto & Pierani, Pierpaolo, 2008. "Price-induced technical progress in Italian agriculture," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 89(4).
    3. Caputo, Michael R. & Paris, Quirino, 2013. "An intertemporal microeconomic theory of disembodied and price-induced technical progress," Economic Modelling, Elsevier, vol. 33(C), pages 631-640.
    4. Meszaros, Sandor, 2008. "Theory testing (hypothesis testing) in agricultural economics," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 107, pages 1-13, March.
    5. Quirino Paris, 2009. "Certainties and Novelties in Production Economics," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 3, August.
    6. Esposti, Roberto & Pierani, Pierpaolo, 2005. "Price-Induced Technological Change in Italian Agriculture: An SGM Restricted Cost Function Approach (1951-91)," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24662, European Association of Agricultural Economists.
    7. Kumar, Surender & Managi, Shunsuke, 2009. "Energy price-induced and exogenous technological change: Assessing the economic and environmental outcomes," Resource and Energy Economics, Elsevier, vol. 31(4), pages 334-353, November.
    8. Quirino Paris, 2008. "Price-induced technical progress in 80 years of US agriculture," Journal of Productivity Analysis, Springer, vol. 30(1), pages 29-51, August.

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    More about this item

    Keywords

    price-induced technical progress; comparative statics; C60; D21;
    All these keywords.

    JEL classification:

    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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