scholarly journals A NOTE ON THE CHARACTERIZATION OF THE NEOCLASSICAL PRODUCTION FUNCTION

2016 ◽  
Vol 21 (7) ◽  
pp. 1827-1835
Author(s):  
Andreas Irmen ◽  
Alfred Maußner
Keyword(s):  
Production Function ◽  
Returns To Scale ◽  
Production Functions ◽  
Alternative Characterization ◽  
Factors Of Production ◽  
Constant Returns To Scale

We study production functions with capital and labor as arguments that exhibit positive, yet diminishing marginal products and constant returns to scale. We show that such functions satisfy the Inada conditions if (i) both inputs are essential and (ii) an unbounded quantity of either input leads to unbounded output. This allows for an alternative characterization of the neoclassical production function that altogether dispenses with the Inada conditions. Although this proposition generalizes to the case of n > 2 factors of production, its converse does not hold: 2n Inada conditions do not imply that each factor is essential.

scholarly journals The Two-level CES Production Function for the Manufacturing Sector of Pakistan

1989 ◽  
Vol 28 (1) ◽  
pp. 1-12 ◽  
Author(s):  
Ashfaque H. Khan
Keyword(s):  
Production Function ◽  
Technical Progress ◽  
Manufacturing Sector ◽  
Relevant Literature ◽  
Returns To Scale ◽  
Appropriate Technology ◽  
Production Functions ◽  
Elasticity Of Substitution ◽  
Two Factors ◽  
Factors Of Production

Production functions have been widely studied in the relevant literature. In this paper, apart from labour and capital, we have used energy as a factor input and calculated the elasticity of substitution between these inputs, measured technical progress, and determined the returns to scale in the manufacturing sector of Pakistan. Since we have more than two factors of production, the standard Cobb· Douglas and CES production functions do not provide satisfactory results. Hence, two·level (nested) CES production function becomes the natural choice for the appropriate technology. Using this technology, we have found low elasticity of substitution between the three factors of production. Furthermore, the manufacturing sector is found to exhibit decreasing returns to scale, having experienced disembodied technical progress at the rate of 3.7 percent per annum.

scholarly journals Fonctions de production dans l’économie du Québec

2009 ◽  
Vol 54 (2) ◽  
pp. 176-206 ◽  
Author(s):  
Vittorio Corbo ◽  
Jean-Marie Dufour
Keyword(s):  
Strong Evidence ◽  
Economic Activity ◽  
Returns To Scale ◽  
Production Functions ◽  
Elasticity Of Substitution ◽  
True Model ◽  
Utilities Services ◽  
Capital Construction ◽  
Constant Returns To Scale ◽  
Work First

The purpose of this paper is to study the characteristics of the production process in the Quebec economy. We devote particular attention to two features of the technology: the returns to scale and the substitution possibilities. Two forms of production functions, the Cobb-Douglas and an homothetic translog production function, are estimated for six branches of economic activity. These are: Agriculture; Fishing and Forestry; Mining; Quarying and Oil Wells; Manufacturing; Utilities; Services. Two main conclusions are derived from this work. First, there is strong evidence of constant returns to scale in all branches of the Quebec economy but services. Second, when comparing the Cobb-Douglas model with an homothetic translog model, the hypothesis that the true model is the Cobb-Douglas one cannot be rejected for five of our six sectors. Therefore, there is evidence that the elasticity of substitution is around one. Finally a byproduct of our work has been the construction of capital stock series for the Quebec economy (1960-73) disaggregated into 14 sectors, and two types of capital: construction and machinery and equipment.

scholarly journals AN ECONOMIC ANALYSIS OF BARLEY PRODUCTION FUNCTIONS IN WASIT PROVINCE FOR 2014

2017 ◽  
Vol 48 (4) ◽  
Author(s):  
AL-ENIZY & AL-KAISY
Keyword(s):  
Production Function ◽  
Returns To Scale ◽  
Influential Factor ◽  
Production Functions ◽  
High Productivity ◽  
Second Stage ◽  
Use Of Resources ◽  
Economic Production ◽  
Two Factors ◽  
The Relationship

The production function of the important methods in the analysis in the components of the production process , by it can be identified the increasing in production for a given amount of resources , there for the objective of search analysis economic production functions of barley crop and knowing nature of the relationship between the factors , to fulfill the requirements of the research we are collected questionnaire from 130 farmers from crop farmers in Wasit province . We estimated by using Cobb-Douglas production function production function and restricted Cobb-Douglas. The results showed that the capital is the most influential factor in the production of barley since raised by 1% will increase production by 0.43% in a Cobb-Douglas function because the capital increase means increasing the technology used , and the factors use fall in the second stage and functions are subject to diminishing returns to scale and ealasticity replacement amounting to 0.76 indicates to the inability to intensity labour to the capital account G.Tintner test pointed to the superiority of the Cobb-Douglas unrestricted model . Also estimated the TL production function according to the random border analysis using the Frontier program , and in a way of the greatest possible ML which shows that if we increased employment by 1% , the production will increase by 0.33 and cross elasticity between labour and capital , amounting to 0.16 has shown to replacement relationship the two factors and technical effeciency at the level of the sample averaged 90% and there was no apparent effect of the acquisition . The research recommended encourage farmers to adopt improved varieties and use of resources packages with high productivity and try to stimulate the demand side of attention to livestock.

scholarly journals Use of production functions in assessing the profitability of shares of insurance companies

2021 ◽  
Vol 11 (2) ◽  
pp. 1539
Author(s):  
Raed Ali Alkhasawneh ◽  
Ahmed Mohamed Farhan Mohamed ◽  
Samir Abdulwahab Jaradat ◽  
M. Sh. Torky ◽  
Mutasem K. Alsmadi
Keyword(s):  
Production Function ◽  
Production Functions ◽  
Insurance Companies ◽  
Nonlinear Functions ◽  
Proposed Model ◽  
Factors Of Production ◽  
Douglas Production Function

In this study the production functions (Cobb-Douglas, Zener-Rivanker, and the transcendental production function) have been used to assess the profitability of insurance companies, by reformulating these nonlinear functions based on the introduction of a set of variables that contribute to increase the explanatory capacity of the model. Then the best production function commensurate with the nature of the variable representing the profitability of insurance companies was chosen, to use it to assess the efficiency of their profitability versus the use of different factors of production and thus the possibility of using it in forecasting. It was found that the proposed model of the production function "Zener-Rivanker" is the best production functions representing the profitability of the Tawuniya and Bupa Insurance Companies. The proposed model of the Cobb-Douglas production function is suitable for the results of both Enaya and Sanad Cooperative Insurance Companies. The explanatory capacity of the production functions was also increased when the proposed variables were added (net subscribed premiums-net claims incurred).

scholarly journals KEUNTUNGAN MAKSIMUM DAN SKALA USAHA SUB SEKTOR KEHUTANAN: SUATU UPAYA PENINGKATAN PRODUKTIVITAS USAHA PERSUTERAAN ALAM DALAM PERSPEKTIF PEMBANGUNAN EKONOMI

2018 ◽  
Vol 1 (2) ◽  
pp. 45
Author(s):  
Nurdiana Nurdiana ◽  
Muhammad Hasan ◽  
Nuraisyiah Nuraisyiah
Keyword(s):  
Quantitative Research ◽  
Returns To Scale ◽  
Economic Feasibility ◽  
Business Enterprises ◽  
Factors Of Production ◽  
Constant Returns To Scale

This study aims to assess the economic feasibility of natural business enterprises in Enrekang Regency in terms of income or business profits. This research is quantitative research. The results of this study indicate that the business scale of natural business enterprises in Enrekang Regency is not in constant returns to scale conditions, so that means that the utilization of resources or factors of production in natural business enterprises in Enrekang Regency can still be improved or developed

The Allocation of Labor and Endogenous Search Decisions

2006 ◽  
Vol 6 (1) ◽  
pp. 1-31
Author(s):  
Lawrence Uren
Keyword(s):  
Comparative Advantage ◽  
Multiple Equilibria ◽  
Returns To Scale ◽  
Investment Decisions ◽  
Production Functions ◽  
Search Frictions ◽  
Constant Returns To Scale

This paper examines the allocation of heterogeneous workers across sectors of an economy in which workers are able to direct their search towards particular firms. We find that search frictions, in addition to causing unemployment, may result in an inefficient allocation of labor. This result arises because of the interaction between the investment decisions of firms and the search decisions of workers. Despite constant returns to scale in both the matching and production functions, this interaction can generate multiple equilibria. The existence of multiple equilibria is shown to depend crucially on the direction of comparative advantage.

scholarly journals Efficiency Analysis of Public Transportation Subunits Using DEA and Bootstrap Approaches -- Dakar Dem Dikk Case Study

2016 ◽  
Vol 8 (6) ◽  
pp. 114 ◽  
Author(s):  
Oumar Sow ◽  
Amar Oukil ◽  
Babacar M. Ndiaye ◽  
Aboubacar Marcos
Keyword(s):  
Public Transportation ◽  
Planning Process ◽  
Returns To Scale ◽  
Transportation Systems ◽  
Data Envelopment ◽  
Bootstrap Approach ◽  
Scale Characterization ◽  
Constant Returns To Scale

Transportation is a sector which plays an important role in the process of development of countries around the world. A crucial step in transportation planning process is the measure of the efficiency of transportation systems in order to guarantee the desired service. This paper investigates the relative efficiencies of lines of the main public transportation company Dakar Dem Dikk (DDD)\footnote{\textit{Dem Dikk} meaning \guillemotleft Go-Return\guillemotright} in Dakar (Senegal). The objective is to apply Data Envelopment Analysis (DEA) and bootstrapping approaches in order to identify opportunities for improvement. In this study, we examine technical efficiency for the 24 lines of DDD using Constant Returns to Scale (CRS) and Variable Returns to Scale (VRS) DEA output oriented models. We apply bootstrap approach for bias correction and for confidence intervals creation of our estimates. Finally, we examine the returns to scale characterization of lines. The results establish that there exist possibilities for improvement for the lines and also shown that there are potential for restructure for some lines.

scholarly journals Cotton Farmers' Technical Efficiency: Stochastic and Nonstochastic Production Function Approaches

2002 ◽  
Vol 31 (2) ◽  
pp. 211-220 ◽  
Author(s):  
Kalyan Chakraborty ◽  
Sukant Misra ◽  
Phillip Johnson
Keyword(s):  
Technical Efficiency ◽  
Production Function ◽  
Returns To Scale ◽  
Empirical Application ◽  
West Texas ◽  
Level Data ◽  
The Mean ◽  
Cotton Farmers ◽  
The Individual ◽  
Constant Returns To Scale

Technical efficiency for cotton growers is examined using both stochastic (SFA) and nonstochastic (DEA) production function approaches. The empirical application uses farm-level data from four counties in west Texas. While efficiency scores for the individual farms differed between SFA and DEA, the mean efficiency scores are invariant of the method of estimation under the assumption of constant returns to scale. On average, irrigated farms are 80% and nonirrigated farms are 70% efficient. Findings show that in Texas, the irrigated farms, on average, could reduce their expenditures on other inputs by 10%, and the nonirrigated farms could reduce their expenditures on machinery and labor by 12% and 13%, respectively, while producing the same level of output.

scholarly journals Production Function and Robotization - How Can CES Technology Help?

2021 ◽  
Author(s):  
Françoise Larbre
Keyword(s):  
Production Function ◽  
Returns To Scale ◽  
Production Functions ◽  
Elasticity Of Substitution ◽  
Cost Functions ◽  
Helpful Tool ◽  
Joint Product ◽  
Short Run ◽  
The Cost

Depending on the workers qualification, the use of robots is perceived either as a helpful tool or as a competitor. We analyze the substitution of capital for labor, including the case where the product is entirely made by robots. We use CES production functions and their derived cost functions (the later being surprisingly missing in the literature). We focus on short-run and the case of an elasticity of substitution greater than 1. We highlight a level of product for which the cost is identical regardless of the factor used. As a joint product, we provide a foundation to cost functions exhibiting first increasing and then decreasing returns to scale (a so far missing justification to the usually assumed shape of cost functions).

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