Induced Innovation and Marginal Cost of New Technology

Yucan Liu and C. Shumway

No 2008-6, Working Papers from School of Economic Sciences, Washington State University

Abstract: The hypothesis of induced innovation has been empirically tested in many ways, using a wide variety of data and test periods for many industries in many countries. However, each test has maintained the hypothesis that the relative marginal cost of developing and implementing technologies that save one input is the same as for any other input. Lacking data on development and implementation costs of input-saving technologies, we develop and use a nonparametric procedure to estimate relative differences required for technical change in U.S. agriculture to be consistent with the induced innovation hypothesis.

Keywords: induced innovation; marginal cost; nonparametric (search for similar items in EconPapers)
JEL-codes: D24 O30 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2008-06
New Economics Papers: this item is included in nep-agr, nep-ino and nep-knm
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Related works:
Journal Article: Induced innovation and marginal cost of new technology (2009)
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