Constructive Identification of Heterogeneous Elasticities in the Cobb-Douglas Production Function

• Tác giả: Tong Li, Yuya Sasaki
• Ngôn ngữ: eng
• Ký hiệu phân loại: 385.1 Economic aspects of production
• Thông tin xuất bản: 2017
• Bộ sưu tập: Metadata
• ID: 161676

Tóm tắt

This paper presents the identification of heterogeneous elasticities in the Cobb-Douglas production function. The identification is constructive with closed-form formulas for the elasticity with respect to each input for each firm. We propose that the flexible input cost ratio plays the role of a control function under "non-collinear heterogeneity" between elasticities with respect to two flexible inputs. The ex ante flexible input cost share can be used to identify the elasticities with respect to flexible inputs for each firm. The elasticities with respect to labor and capital can be subsequently identified for each firm under the timing assumption admitting the functional independence.