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Alternative Estimates of Factor Intensity and Net Saving (Cost) of Factors: Some Results for Indian Economy

Arun K. Sengupta
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Arun K. Sengupta: Indian Statistical Institute, Calcutta

Indian Economic Review, 1990, vol. 25, issue 1, 47-56

Abstract: The orthodox measure of total factor intensity developed by Leontief assumes that all intermediate inputs are produced domestically. When some of the intermediate inputs are imported, Reidel(1975) has suggested a method of calculating total factor intensity which takes into account the factor requirements in producing goods which are exchanged for imported inputs. Using these two alternative methods, this paper obtains estimates of factor intensity for different producing sectors in India. The exercise carried out in this paper has shown that the importation of intermediate inputs as prevailed in the year 1979-80 in the Indian economy results in a net saving of capital and a net additional cost of labour.

Date: 1990
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