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THE ELASTICITY OF SUBSTITUTION
Author(s) -
Soper C. S.
Publication year - 1965
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1965.tb03100.x
Subject(s) - citation , substitution (logic) , elasticity of substitution , elasticity (physics) , computer science , mathematical economics , library science , mathematics , economics , microeconomics , production (economics) , programming language , physics , thermodynamics
Let us now turn to the issue of measuring the degree of substitutability between any pair of factors. One of the most famous ones is the elasticity of substitution, introduced independently by John Hicks (1932) and Joan Robinson (1933). Formally, the elasticity of substitution measures the percentage change in factor proportions due to a change in marginal rate of technical substitution. In other words, for our canonical production function, Y = (K, L), the elasticity of substitution between capital and labor is given by: