Elasticities of Substitution and Complementarity: A Synthesis

Paolo Bertoletti ()

Journal of Productivity Analysis, 2005, vol. 24, issue 2, 183-196

Abstract: We derive the relationships between the net and gross elasticities of substitution and complementarity (i.e., the elasticities that refer either to the conditional or unconditional, direct or inverse demand system) in the general case of non-homothetic, variable-returns-to-scale technologies. We also show that the so-called Hicks Elasticity of Complementarity (Hicks, Oxford economic Papers 22, 289–296 (1970)) is dual to a full-fledged elasticity of gross input substitution that we call the Hotelling/Lau Elasticity of Substitution (Lau, Production Economics: A Dual Approach to Theory and Applications. Amsterdam: North-Holand (1978)). The former is, in fact, the proper elasticity of substitution in the case of the inverse, unconditional input demand. Our results should clarify some issues about the input substitutability classification. Copyright Springer Science+Business Media, Inc. 2005

Keywords: elasticity of substitution and complementarity; inverse demand; returns to scale; homotheticity; D11; D24; D33 (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://hdl.handle.net/10.1007/s11123-005-4703-3 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jproda:v:24:y:2005:i:2:p:183-196

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11123/PS2

DOI: 10.1007/s11123-005-4703-3

Access Statistics for this article

Journal of Productivity Analysis is currently edited by William Greene, Chris O'Donnell and Victor Podinovski

More articles in Journal of Productivity Analysis from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().