HOW MISLEADING CAN ALLEN ELASTICITIES OF SUBSTITUTION BE?
Timothy G. Taylor and
Gautam Gupta ()
No 270855, 1990 Annual meeting, August 5-8, Vancouver, Canada from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)
The Allen elasticity of substitution has recently been shown to be an incorrect measure of substitutability when there are more than two inputs. This paper presents an empirical comparison of the Morishima and Allen elasticities based on a translog cost function estimated using data for aggregate southeastern U.S. Agriculture. The results indicate substantial differences. in the two measures.
Keywords: Agricultural and Food Policy; Research Methods/ Statistical Methods (search for similar items in EconPapers)
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