Elasticity of complementarity
From Infogalactic: the planetary knowledge core
Lua error in package.lua at line 80: module 'strict' not found.
Elasticity of complementarity (Hamermesh, 1993) is the percentage responsiveness of relative factor prices to a 1 percent change in relative inputs.
Mathematical definition
Given the production function then the elasticity of complementarity is defined as
- Failed to parse (Missing <code>texvc</code> executable. Please see math/README to configure.): c = \frac {d \ln \left(\displaystyle \frac{df}{dx_1}/ \displaystyle\frac{df}{dx_2} \right)} {d \ln (x_2/x_1) } = \frac{\displaystyle \frac{d (\frac{df}{dx_1}/\frac{df}{dx_2})}{\frac{df}{dx_1}/\frac{df}{dx_2}}} {\displaystyle \frac{d (x_2/x_1) }{x_2/x_1}}.
The inverse of elasticity of complementarity is elasticity of substitution.
References
- Hamermesh, Daniel S., Labor Demand, Princeton University Press, Princeton NJ, 1993, ISBN 0-691-02587-8
<templatestyles src="Asbox/styles.css"></templatestyles>