Regional dimensions of factor and fuel substitution in U.S. manufacturing

This paper analyzes the regional responses to price increases in U.S. manufacturing in the form of fuel and factor substitution. A translog specification of a production process with eight inputs organized into a two stage optimization process — optimizing the mix of four fuels that constitute the e...

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Bibliographic Details
Published inRegional science and urban economics Vol. 14; no. 3; pp. 381 - 398
Main Authors Lakshmanan, T.R., Anderson, W., Jourabchi, M.
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.08.1984
Elsevier
North-Holland
Elsevier Sequoia S.A
SeriesRegional Science and Urban Economics
Subjects
Economic theory
Factors
Fuels
Manufacturing
Optimization
Price elasticity
Substitution
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Summary:This paper analyzes the regional responses to price increases in U.S. manufacturing in the form of fuel and factor substitution. A translog specification of a production process with eight inputs organized into a two stage optimization process — optimizing the mix of four fuels that constitute the energy input and then optimizing the input mix of physical capital, working capital, labor and aggregate energy — is used. Sectoral and regional variations in factor and fuel substitutions as evident from econometric estimation of the model at the level of 50 states and four census regions are discussed and interpreted.
ISSN:0166-0462
1879-2308
DOI:10.1016/0166-0462(84)90008-5