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Robust Estimation of Heckman Model Read chapter Read first chapter

2017 | OriginalPaper | Chapter

How to Explain Ubiquity of Constant Elasticity of Substitution (CES) Production and Utility Functions Without Explicitly Postulating CES

Authors : Olga Kosheleva, Vladik Kreinovich, Thongchai Dumrongpokaphan

Published in: Robustness in Econometrics

Publisher: Springer International Publishing

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Abstract

In many situations, the dependence of the production or utility on the corresponding factors is described by the CES (Constant Elasticity of Substitution) functions. These functions are usually explained by postulating two requirements: an economically reasonable postulate of homogeneity (that the formulas should not change if we change a measuring unit) and a less convincing CSE requirement. In this paper, we show that the CES requirement can be replaced by a more convincing requirement—that the combined effect of all the factors should not depend on the order in which we combine these factors.

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Metadata
Title
How to Explain Ubiquity of Constant Elasticity of Substitution (CES) Production and Utility Functions Without Explicitly Postulating CES
Authors
Olga Kosheleva
Vladik Kreinovich
Thongchai Dumrongpokaphan
Copyright Year
2017
Book
Robustness in Econometrics

Print ISBN: 978-3-319-50741-5

Electronic ISBN: 978-3-319-50742-2

Copyright Year: 2017

DOI
https://doi.org/10.1007/978-3-319-50742-2_6

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