publication . Article . Book . 2007

The Morishima gross elasticity of substitution

Blackorby, Charles; Primont, Daniel; Russell, R. Robert;
Open Access
  • Published: 30 May 2007 Journal: Journal of Productivity Analysis, volume 28, pages 203-208 (issn: 0895-562X, eissn: 1573-0441, Copyright policy)
  • Publisher: Springer Science and Business Media LLC
  • Country: United Kingdom
Abstract
We show that the Hotelling–Lau elasticity of substitution, an extension of the Allen–Uzawa elasticity to allow for optimal output-quantity (or utility) responses to changes in factor prices, inherits all of the failings of the Allen–Uzawa elasticity identified by Blackorby and Russell [(1989) Am Econ Rev 79: 882–888]. An analogous extension of the Morishima elasticity of substitution to allow for output quantity changes preserves the salient properties of the original Hicksian notion of elasticity of substitution.
Subjects
free text keywords: Economics and Econometrics, Social Sciences (miscellaneous), Business and International Management, Factor price, Elasticity (economics), Microeconomics, Elasticity of substitution, Economics, Mathematical economics, Econometrics, HB
Related Organizations

Allen, G. D.,and J. R. Hicks. “A Reconsideration of the Theory of Value, Part II.” (1934). Economica 1, 196-219. [OpenAIRE]

Bertoletti, P. “The Allen/Uzawa Elasticity of Substitution as a Measure of Gross Input Substitutability.” (2001) Rivista italiana degli economisti 6, 87-94. [OpenAIRE]

Bertoletti, P. “Elasticities of Substitution and Complementarity” A Synthesis.” (2005). Journal of Productivity Analysis 24, 183-196.

Blackorby, C., and R. R. Russell. “The Partial Elasticity of Substitution.” (1975). Discussion Paper No. 75-1, Department of Economics, University of California, San Diego.

Blackorby, C., and R. R. Russell. “The Morishima Elasticity of Substitution: Symmetry, Constancy, Separability, and Its Relationship to the Hicks and Allen Elasticities.” (1981). Review of Economic Studies 48, 147-158.

Blackorby, C., and R. R. Russell. “Will the Real Elasticity of Substitution Please Stand Up?.” (1989). American Economic Review 79, 882-888. [OpenAIRE]

Davis, G. C., and C. R. Shumway. “To Tell the Truth about Interpreting the Morishima Elasticity of Substitution.” (1996). Canadian Journal of Agricultural Economics 44, 173-182.

Hicks, J. R. The Theory of Wages. (1932). London: Macmillan.

Kim, H. Y. “The Antonelli Versus Hicks Elasticity of Complementarity and Inverse Input Demand Systems.” (2000). Australian Economic Papers 39, 245-261.

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