Estimating the Substitution Elasticities Between Commodity Import, Labor Force and Capital Usage in Iran (Using Translog Cost Function)

Abstract:
چکیده: In most studies in the field of international economics import is considered as a final consumer good in the consumption basket of consumers. Accordingly, if import is considered as a factor of production, estimation of import demand function would be considered as an innovation. In this paper, with the use of shephard lema function, share of each factor of production in total costs has been estimated, and with the use of these estimates price elasticity's and cross elasticity's have been achieved. Also in this paper Morishima. Elasticities (MES) have been estimated. As MES elasticities are explanatory factors showing changes in the ratio of all factors, (due to price change of one of the factors of production) utilization of factors of production has been considered. The factors of production in this paper are capital, labor and imports. The results of the assessments show that there is a substitution relation between capital, labor and (commodity) imports. The results also shown that there is a complimentary relation between labor and commodity imports.
Language:
Persian
Published:
Journal of Economic Research, Volume:43 Issue: 82, 2008
Page:
53
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