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).

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 On the uniqueness of the solution of the cost minimization problem with generalized Sato production function

2021 ◽  
Vol 12 (1) ◽  
pp. 37-48
Author(s):  
Vedran Kojic ◽  
Zrinka Lukac ◽  
Krunoslav Puljic
Keyword(s):  
Production Function ◽  
Minimization Problem ◽  
Cost Minimization ◽  
Theory Of The Firm ◽  
Production Functions ◽  
Elasticity Of Substitution ◽  
Uniqueness Of The Solution ◽  
Cost Minimization Problem ◽  
The Cost ◽  
Standard Production

Whenever a firm is maximizing its profit, it necessarily has to minimize its cost. Thus, the cost minimization problem is one of the central problems in the theory of the firm. When presenting this problem, the majority of microeconomic textbooks use very well-known production functions, such as Leontief, Cobb-Douglas, or other CES production functions. The goal of this paper is to analyze the cost minimization problem with the generalized Sato production function. The generalized Sato production function is one of the non-standard production functions with variable elasticity of substitution. First, we show that the generalized Sato production function is continuous, strictly monotone, strictly quasiconcave and that a positive amount of output requires positive amounts of some of the inputs. Next, by using mathematical programming we show that the cost minimization problem with generalized Sato production function has a unique solution. This result is very important since it implies the existence of the corresponding cost function and conditional input demands.

scholarly journals Application of the theory of decision making under risk and uncertainty at modelling of costs

2010 ◽  
Vol 56 (No. 5) ◽  
pp. 201-208 ◽  
Author(s):  
M. Beranová ◽  
D. Martinovičová
Keyword(s):  
Decision Making ◽  
Financial Accounting ◽  
Cost Functions ◽  
Risk And Uncertainty ◽  
Managerial Decision ◽  
Managerial Decision Making ◽  
Bayesian Theorem ◽  
Long Run ◽  
Short Run ◽  
The Cost

The costs functions are mentioned mostly in the relation to the Break-even Analysis where they are presented in the linear form. But there exist several different types and forms of cost functions. Fist of all, it is necessary to distinguish between the short-run and long-run cost function that are both very important tools of the managerial decision making even if each one is used on a different level of management. Also several methods of estimation of the cost function's parameters are elaborated in the literature. But all these methods are based on the past data taken from the financial accounting while the financial accounting is not able to separate the fixed and variable costs and it is also strongly adjusted to taxation in the many companies. As a tool of the managerial decision making support, the cost functions should provide a vision to the future where many factors of risk and uncertainty influence economic results. Consequently, these random factors should be considered in the construction of cost functions, especially in the long-run. In order to quantify the influences of these risks and uncertainties, the authors submit the application of the Bayesian Theorem.

scholarly journals Local and Global Dynamics in a Discrete Time Growth Model with Nonconcave Production Function

2012 ◽  
Vol 2012 ◽  
pp. 1-22 ◽  
Author(s):  
Serena Brianzoni ◽  
Cristiana Mammana ◽  
Elisabetta Michetti
Keyword(s):  
Production Function ◽  
Growth Model ◽  
Discrete Time ◽  
Production Functions ◽  
Elasticity Of Substitution ◽  
Global Dynamics ◽  
Production Factors ◽  
Local And Global Dynamics ◽  
Complex Features

We study the dynamics shown by the discrete time neoclassical one-sector growth model with differential savings while assuming a nonconcave production function. We prove that complex features exhibited are related both to the structure of the coexixting attractors and to their basins. We also show that complexity emerges if the elasticity of substitution between production factors is low enough and shareholders save more than workers, confirming the results obtained while considering concave production functions.

scholarly journals Profitability of sandbar cropping method of pumpkin cultivation in char land areas of northern Bangladesh

2018 ◽  
Vol 42 (4) ◽  
pp. 647-663 ◽  
Author(s):  
M Khatun ◽  
MA Rashid ◽  
MAM Miah ◽  
S Khandoker ◽  
MT Islam
Keyword(s):  
Production Function ◽  
Resource Use ◽  
Returns To Scale ◽  
Marginal Product ◽  
Resource Use Efficiency ◽  
Net Returns ◽  
Resource Cost ◽  
Use Efficiency ◽  
The Cost ◽  
Domestic Resource

The study was undertaken to find out the profitability and export potentialities of pumpkin cultivation in the char lands of Rangpur and Gaibandha district of Bangladesh. A total of 120 pumpkin growers taking 60 farmers from each district were randomly selected for the study. Descriptive statistics was used to analyze cost and return of pumpkin. The Cobb-Douglass production function was used to estimate the coefficients of the various variables analysed and MPP, MVP and resource use efficiency were also used to estimate the efficiency of resource use in the study area. The study revealed that net returns were positive for pumpkin cultivation. However, the higher net return was estimated for Rangpur district (Tk 105,299/ha) compared to Gaibandha (Tk.93, 936/ha). Bangladesh had comparative advantage for producing pumpkin as the estimates of domestic resource cost (DRC) was less than one. The value of DRC for pumpkin was less than unity implied that the production of pumpkin would be highly efficient for export promotion. The estimated results of the Cobb-Douglass production function showed increasing returns to scale. The results of the efficiency computation indicated that inputs were underutilized. Farmers in the study area used too little input to cultivate pumpkin that means the cost of using inputs is less than the value of marginal product. This suggests that farmers can incur more cost for these inputs to be efficient and then production will be increased.Bangladesh J. Agril. Res. 42(4): 647-663, December 2017

Educational Production Functions

1978 ◽  
Vol 3 (3) ◽  
pp. 209-231 ◽  
Author(s):  
Solomon W. Polachek ◽  
Thomas J. Kniesner ◽  
Henrick J. Harwood
Keyword(s):  
Academic Achievement ◽  
Maximum Likelihood ◽  
Production Function ◽  
Production Functions ◽  
Elasticity Of Substitution ◽  
Likelihood Methods ◽  
Educational Backgrounds ◽  
Scholastic Performance ◽  
Maximum Likelihood Methods ◽  
Educational Production

This research examines scholastic performance within the context of an individual’s production function. A constant partial elasticity of substitution production function for academic achievement is presented and estimated with non linear maximum likelihood methods. We find that ability and time devoted to various aspects of the learning process are the most important determinants of students’ accomplishments. Our results underscore the potential for students to compensate for relatively “poor” educational backgrounds by spending more time on study and class attendance.

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.

CONSTANT-ELASTICITY-OF-SUBSTITUTION PRODUCTION FUNCTION

2008 ◽  
Vol 12 (5) ◽  
pp. 694-701 ◽  
Author(s):  
Hideki Nakamura ◽  
Masakatsu Nakamura
Keyword(s):  
Production Function ◽  
Capital Accumulation ◽  
Specific Form ◽  
Production Functions ◽  
Elasticity Of Substitution ◽  
Intermediate Goods ◽  
Constant Elasticity ◽  
Constant Elasticity Of Substitution ◽  
Douglas Production Function

We consider endogenous changes of inputs from labor to capital in the production of intermediate goods, i.e., a form of mechanization. We derive complementary relationships between capital accumulation and mechanization by assuming a Cobb–Douglas production function for the production of final goods from intermediate goods. A constant-elasticity-of-substitution production function in which the elasticity of substitution exceeds unity can be endogenously derived as the envelope of Cobb–Douglas production functions when the efficiency of inputs is assumed in a specific form. The difficulty of mechanization represents the elasticity of substitution.

scholarly journals Intermetropolitan Comparisons Of Production Function

2011 ◽  
Vol 3 (2) ◽  
pp. 112
Author(s):  
Martin Williams ◽  
Tuan Ton-That
Keyword(s):  
Production Function ◽  
Production Technology ◽  
Returns To Scale ◽  
Elasticity Of Substitution ◽  
Constant Elasticity ◽  
Constant Elasticity Of Substitution ◽  
Different Levels ◽  
Variable Returns To Scale ◽  
Inputs And Outputs

A nonhomogeneous production is used to study the features of the production technology across U.S. cities. We compute marginal productivities and scale elasticities for different levels of inputs and outputs. The form of the production function allows variable returns to scale. We can also test the Cobb-Douglas and constant elasticity of substitution forms within the nonhomogeneous specification. Conclusions are drawn concerning returns to scale across cities of different sizes.

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.

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