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Derivation of the Hicks, or direct, elasticity of substitution using the input distance function

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  • Stern, David I.

Abstract

I derive a new symmetric elasticity of complementarity from the input distance function by imposing a constant distance condition. Assuming technical efficiency and a single output, the Hicks elasticity of substitution is its reciprocal.

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  • Stern, David I., 2010. "Derivation of the Hicks, or direct, elasticity of substitution using the input distance function," Economics Letters, Elsevier, vol. 108(3), pages 349-351, September.
    • Handle: RePEc:eee:ecolet:v:108:y:2010:i:3:p:349-351
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    References listed on IDEAS

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    1. Charles Blackorby & R. Robert Russell, 1981. "The Morishima Elasticity of Substitution; Symmetry, Constancy, Separability, and its Relationship to the Hicks and Allen Elasticities," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 48(1), pages 147-158.
    2. Blackorby, Charles & Russell, R Robert, 1989. "Will the Real Elasticity of Substitution Please Stand Up? (A Comparison of the Allen/Uzawa and Morishima Elasticities)," American Economic Review, American Economic Association, vol. 79(4), pages 882-888, September.
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    8. Koetse, Mark J. & de Groot, Henri L.F. & Florax, Raymond J.G.M., 2008. "Capital-energy substitution and shifts in factor demand: A meta-analysis," Energy Economics, Elsevier, vol. 30(5), pages 2236-2251, September.
    9. repec:bla:ausecp:v:39:y:2000:i:2:p:245-61 is not listed on IDEAS
    10. H. Youn Kim, 2000. "The Antonelli Versus Hicks Elasticity of Complementarity and Inverse Input Demand Systems," Australian Economic Papers, Wiley Blackwell, vol. 39(2), pages 245-261, June.
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    4. David Baqaee & Emmanuel Farhi, 2018. "The Microeconomic Foundations of Aggregate Production Functions," NBER Working Papers 25293, National Bureau of Economic Research, Inc.
    5. David Stern, 2011. "Elasticities of substitution and complementarity," Journal of Productivity Analysis, Springer, vol. 36(1), pages 79-89, August.

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