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The Allen/Uzawa Elasticity of Substitution as a Measure of Gross input Substitutability

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  • Paolo Bertoletti

Abstract

The Allen/Uzawa elasticity of substitution, still commonly used in the empirical studies to account for "net" substitutability, has been subject to a number of theoretical criticisms. In this paper we reconsider the Allen/Uzawa elasticity of substitution as a measure of "gross" substitutability, and show that to this relevant purpose it can be meaningfully interpreted in conjunction with the returns-to-scale properties of the technology.

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  • Paolo Bertoletti, 2001. "The Allen/Uzawa Elasticity of Substitution as a Measure of Gross input Substitutability," Rivista italiana degli economisti, Società editrice il Mulino, issue 1, pages 87-94.
  • Handle: RePEc:mul:jqat1f:doi:10.1427/3690:y:2001:i:1:p:87-94
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    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.

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