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Differential Elasticity of Substitution in the Indian Industries


  • Upender, M.

    () (Department of Economics, Osmania University, Hyderabad, India)

  • Sujan, M.

    () (Department of Civil Engineering, University College of Engineering, Osmania University, Hyderabad)


The paper specifically focuses on the impact of reforms to see whether there has been any shift in the differential elasticity of substitution between labour and capital in Indian industry. The main conclusion of the paper is that there are differential elasticities of substitution between labour and capital, both pre and post economic reform period in India, hence substitution possibilities are relatively skewed in favour of labour during post economic reform in the Indian industry.

Suggested Citation

  • Upender, M. & Sujan, M., 2009. "Differential Elasticity of Substitution in the Indian Industries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 6(3), pages 47-55, September.
  • Handle: RePEc:rjr:romjef:v:6:y:2009:i:3:p:47-55

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    ; CES Production Function; Differential Elasticity; Economic Reforms;

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy


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