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Article: Estimation of elasticities of substitution for CES and VES production functions using firm-level data for food-processing industries in Pakistan.(constant elasticity of substitution, variable elasticity of substitution)(Report)
- Article from:
- Pakistan Development Review
- Article date:
- March 22, 1988
- Author:
CopyrightCOPYRIGHT 1988 Reproduced with permission of the Publications Division, Pakistan Institute of Development Economies, Islamabad, Pakistan. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Analyses involving CES and VES production functions indicate that the constant-returns-to-scale CES model is an adequate representation of large-scale firms in the wheat-flour milling, rice husking, sugar refining and edible-oil processing industries in Pakistan. The hypothesis that these four food-processing industries have the same elasticities of substitution is not rejected. The pooled elasticity estimate for the food-processing industries is significantly different from zero, but not significantly different from one
I. INTRODUCTION
A recent study by Battese and Malik (1986b) has shown that there are considerably greater labour-capital substitution ...