Abstract
A simple framework is developed for measuring input substitution and output expansion effects. These measures are nonparametric in the sense that specification and/or estimation of any parametric functions are not resquired. Monte Carlo experiments performed in the paper demonstrate the superiority of the proposed approach. An empirical application to Japanese manufacturing data yields results which satisfy a priori expectations.
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I wish to thank Professors William E. Griffiths, Baldev Raj, Jean-Marie Dufour, Ross Drynan, Gordon MacAulay, two anonymous referees of this journal and Dr. Yun Zhang for constructive comments on earlier drafts of this paper.
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Wan, G.H. Measuring input substitution and output expansion effects: A nonparametric approach with application. Empirical Economics 21, 361–380 (1996). https://doi.org/10.1007/BF01179863
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DOI: https://doi.org/10.1007/BF01179863