Production Functions with Constant Elasticities of Substitution

Uzawa, Hirofumi

doi:10.2307/2296305

Cited by 636 publications

(182 citation statements)

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“…The shortcoming of Hick's elasticity of substitution is that the estimation needs to be carried out based on the hypothesis that other input factors remain unchanged, which is obviously a biased estimation. Hick's substitution elasticity was improved by [12], and then proven by [13], which has been named Allen elasticity of substitution (AES).…”

Section: Figure1 the Primary Energy Consumption Of China And Us And mentioning

confidence: 99%

Energy Substitution Effect on China’s Heavy Industry: Perspectives of a Translog Production Function and Ridge Regression

Lin

Kui

2017

Sustainability

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Abstract:A translog production function model with input factors including energy, capital, and labor is established for China's heavy industry. Using the ridge regression method, the output elasticity of each input factor and the substitution elasticity between input factors are analyzed. The empirical results show that the output elasticity of energy, capital and labor are all positive, while the output elasticities of energy and capital are relatively higher, indicating that China's heavy industry is energy-and capital-intensive. Simultaneously, all the input factors are substitutes, with the substitution between labor and energy having the highest degree of responsiveness. The substitution elasticity between labor and energy is decreasing, while the substitution elasticities of capital for energy and labor are increasing. More capital input can help to improve energy efficiency and thus accomplish the goal of energy conservation in China's heavy industry.

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Section: Figure1 the Primary Energy Consumption Of China And Us And mentioning

confidence: 99%

Energy Substitution Effect on China’s Heavy Industry: Perspectives of a Translog Production Function and Ridge Regression

Lin

Kui

2017

Sustainability

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“…The second concept was originally coined the partial elasticity of substitution, but is now generally known as the Allen elasticity of substitution (AES). It can be calculated from the system of translog cost share equations discussed in the previous section by (see Uzawa, 1962):…”

Section: Cross-price and Morishima Substitution Elasticitiesmentioning

confidence: 99%

Capital-Energy Substitution and Shifts in Factor Demand: A Meta-Analysis

2006

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“…The CES functional form adopted in (5) allows for flexibility in parameterizing the factors of production either as substitutes or complements (Uzawa (1962)). We restrict the technology so that inputs are complements in production (ie, γ < 0) for both theoretical and empirical reasons.…”

Section: Calvó-armengol and Jacksonmentioning

confidence: 99%

Neighborhood Dynamics and the Distribution of Opportunity

Aliprantis

Carroll

2015

Working Paper (Federal Reserve Bank of Cleveland)

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Wilson (1987) argued that policies ending racial discrimination would not equalize opportunity without addressing residential sorting and neighborhood externalities. This paper studies related counterfactual policies using an overlapping-generations dynamic general equilibrium model of residential sorting and intergenerational human capital accumulation. In the model, households choose where to live and how much to invest toward the production of their child's human capital. The return on parents' investment is determined in part by the child's ability and in part by an externality determined by the human capital in their neighborhood. We calibrate the model with two neighborhoods and neighborhood-specifi c production technologies to data from Chicago when mobility was restricted by race. We then conduct three numerical experiments by eliminating the restriction on neighborhood choice, equalizing production technologies, or both. We fi nd that allowing residential mobility generates persistent income inequality, even when technologies are equalized across neighborhoods. Equalizing technologies only equalizes opportunity for residents in the originally segregated neighborhood when high-income households reside there. Our fi ndings suggest that policies aimed at improving outcomes in impoverished areas should feature incentives for high-income households to stay or migrate into the neighborhood.JEL codes: D31, D58, E24, J24, R23.

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Production Functions with Constant Elasticities of Substitution

Cited by 636 publications

References 1 publication

Energy Substitution Effect on China’s Heavy Industry: Perspectives of a Translog Production Function and Ridge Regression

Energy Substitution Effect on China’s Heavy Industry: Perspectives of a Translog Production Function and Ridge Regression

Capital-Energy Substitution and Shifts in Factor Demand: A Meta-Analysis

Neighborhood Dynamics and the Distribution of Opportunity

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