Empirical Estimation of the Elasticity of Substitution: A Review
Centre of Policy Studies/IMPACT Centre Working Papers from Victoria University, Centre of Policy Studies/IMPACT Centre
This review of time series and cross-sectional studies indicates that there is little agreement as to the "true" value of the elasticity of substitution. There appears to be no clear-cut explanation for the diversity of the estimates. Not only do the various studies attribute widely different absolute levels to the elasticity of substitution in the industries considered, but there is also no apparent consistency between the ordinal rankings of the industries within each study. There is however a general pattern of differences between the cross-sectional and time series estimates -- namely, the former are usually larger (averaging about 1) than the latter (averaging perhaps about 0.5). Please note: The PDF download of this fairly old paper is an optical scan.
Keywords: Capital; labour; elasticity of substitution (search for similar items in EconPapers)
JEL-codes: C68 C13 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (12) Track citations by RSS feed
Downloads: (external link)
https://www.copsmodels.com/ftp/workpapr/op-09.pdf Initial version, 1976-11 (application/pdf)
https://www.copsmodels.com/elecpapr/op-09.htm Local abstract: may link to additional material. (text/html)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cop:wpaper:op-09
Access Statistics for this paper
More papers in Centre of Policy Studies/IMPACT Centre Working Papers from Victoria University, Centre of Policy Studies/IMPACT Centre Contact information at EDIRC.
Bibliographic data for series maintained by Mark Horridge ().