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The CES‐‐Translog Production Function, Returns to Scale and AES
Author(s) -
Kymn Kern O.,
Hisnanick John J.
Publication year - 2001
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/1467-8586.00131
Subject(s) - homothetic transformation , economics , substitution (logic) , production (economics) , econometrics , function (biology) , returns to scale , a priori and a posteriori , scale (ratio) , microeconomics , mathematics , computer science , philosophy , physics , geometry , epistemology , quantum mechanics , evolutionary biology , programming language , biology
The translog functional form imposes no a priori restrictions on the substitution possibilities between the factor inputs, by relaxing the assumption of strong separability, and the CES–translog cost function specification allows for testing homothetic technology with Hicks‐neutral technical change. In this paper an n ‐factor CES–translog production function is presented which develops the parameters to directly assess scale effects from those due to technology in the production structure. In addition, by applying Shephard’s lemma it was possible to derive the input demand functions, as well as the partial elasticities of substitution and the cross‐partial price elasticities of demand for a generalized CES–translog production structure.