factor demand technical change and inter fuel substitution in africa abstract the translog production function has been widely used in applied production analysis due to its flexibility and superiority over other functional forms this study develops a translog production function for a group of african countries the random effects model is estimated using generalized least squares estimator the main findings are first output in africa is driven by a more intensive use of petroleum and electricity and to a lesser extent capital labor and coal relative to technological progress second african production technology exhibits increasing returns to scale suggesting a path towards market entry barriers third technical change is scale biased and factor augmenting albeit very slow fourth all energy inputs are substitutes indicating africa s potential to proportionally switch towards cleaner fuels without adversely affecting economic growth finally and perhaps more generally the study reinforces the assertion that imposing restrictions like homotheticity homogeneity or separability on the production technology is unrealistic and should rather be a testable hypothesis within any applied analysis in view of the documented findings relevant implications for africa are discussed

brazilian energy efficiency and energy substitution a road to cleaner national energy system abstract recognizing the need to increase energy efficiency across various sectors of the economy the brazilian government through the national energy efficiency plan adopted in 2011 seeks to avoid 30 million tons of co2 emissions through a reduction in electricity consumption of about 10 by 2030 notwithstanding we believe that a complete realization of such initiative will be dependent on the level of substitutability between different production factors and fuel types using the translog production function method this paper first provides insight on the economic impact of both factor and fuel inputs in brazil most importantly we examine the possibility of substitution among capital labor petroleum and electricity the ridge regression technique was used to estimate the parameters after our data depicted the existence of multicollinearity our results show that capital and labor are positively linked to output however petroleum and electricity contribute negatively to economic output in brazil of which corruption is a plausible reason again all variable inputs are substitutes with their relative technological progress depicting features of convergence this implies that brazil can achieve a cleaner energy system without much challenges due to the possibility of switching from greenhouse gas ghg emitting petroleum to a cleaner energy electricity our findings also highlight the importance of policies that advance merger of enterprises and renewable energy use

semi nonparametric estimates of interfuel substitution in u s energy demand abstract this paper focuses on the demand for crude oil natural gas and coal in the united states in the context of two globally flexible functional forms the fourier and the asymptotically ideal model aim estimated subject to full regularity using methods suggested over 20 years ago by gallant and golub gallant a ronald and golub gene h imposing curvature restrictions on flexible functional forms journal of econometrics 26 1984 295 321 and recently used by serletis and shahmoradi serletis a shahmoradi a 2005 semi nonparametric estimates of the demand for money in the united states macroeconomic dynamics 9 542 559 in the monetary demand systems literature we provide a comparison in terms of a full set of elasticities and also a policy perspective using for the first time parameter estimates that are consistent with global regularity

energy substitution effect on transport sector of pakistan a trans log production function approach abstract transport sector of pakistan is one of the highest fossil fuel consumption and carbon dioxide co2 emission sector as a key user of fossil fuel energy pakistan s transport sector has created many problems i e noise air pollution co2 emissions and environmental problem in this study trans log production function model for pakistan s transport sector is established and input factors of labor capital and energy consumption are comprised the output elasticity of an individual input elasticity between a pair of factors and elasticity of substitution between input factors are analyzed to manage the multicollinearity issue ridge regression is applied at different values of k from 1991 to 2018 the outcomes show that output elasticities and a pair of input factor s elasticities are increasing the elasticities of substitutions between labor energy consumption and capital energy consumption show higher outcomes because of the more elevated amount of substitution elasticities the substitution elasticity between labor and capital starts from 0 9797 to 0 9326 with slightly decreasing trend the outcomes suggest that maximum output can be achieved by increasing capital and energy technologies by allocating the maximum capital in the transport industry energy saving technologies substitution between energy and capital and substitution among capital labor can enhance environmental protection in the above s view function the present study estimates the level of energy saving and co2 emissions reduction under the different scenarios from 2015 to 2018 the policy suggestions of the results are given below

the effect of deregulation on us fossil fuel substitution in the generation of electricity abstract fossil fuels produce the majority of electricity in the us with coal being by far the most popular fuel used in the past regulation in the natural gas market in the form of well head price controls and under the boiler fuel use restrictions distorted fuel use away from natural gas more recently with deregulation in the natural gas industry these restrictions have been repealed which has changed fuel use patterns to measure the short run fuel use response from regulatory and other market changes we estimate interfuel substitution using two flexible functional forms the translog and the logit on monthly data from 1991 to 1993 in both models we find coal demand has the least elastic price response while gas and oil demand have the highest both models also suggest there is substitution across fuels in the short run but the patterns and magnitudes vary from comparisons with earlier studies fuel use price response is also found to vary across market conditions and regulatory regime

separability functional form and regulatory policy in models of interfuel substitution abstract counter intuitive results such as positive own price elasticities have been found in some studies of interfuel substitution this paper examines three possible reasons for this problem first including energy materials in petroleum and coal aggregates is found to contribute to incorrect signs second the mathematical properties of the translog function contribute to concavity violations in contrast the linear logit model of cost shares is found to provide more sensible estimates of own price elasticities across alternative model specifications finally natural gas curtailment policies and environmental regulations are found to be significant factors influencing us industrial fuel demand although omission of these factors does not directly contribute to curvature violations

estimates of inter fuel substitution possibilities in chinese chemical industry abstract the chemical sector is a key driver of china s remarkable growth record and accounts for about 10 of the country s gdp this has made the industry energy intensive and consequently a major contributor to greenhouse gas emissions ghg and other pollutants this study has attempted to investigate the potential for inter fuel substitution between coal oil natural gas and electricity in chinese chemical sector by employing a translog production and cost function ridge regression procedure was adopted to estimate the parameters of the function estimation results show that all energy inputs are substitutes in addition the study produces evidence that the significant role of coal in the chinese chemical fuel mix converges over time albeit slowly these results suggest that price based policies coupled with capital subsidy programs can be adopted to redirect technology use towards cleaner energy sources like electricity and natural gas hence retaining the ability to fuel the chemical sector while also mitigating ghg emissions notwithstanding one must understand that the extent to which substituting electricity for coal will be effective depends on the extent to which coal or oil is used in generating electricity the findings of this study provide general insights and underscore the importance of chinese government policies that focus on installed capacity of renewable electricity energy intensity targets as well as merger of enterprises

how is demand for natural gas determined across european industrial sectors abstract this paper estimates the response of manufacturing sectors natural gas demand to price and output changes the average response to future changes in absolute and relative prices of the manufacturing industry in an oecd country depends on the mix of manufacturing industries particularly with respect to energy intensity and substitution opportunities in production we estimate short and long run demand elasticities using a shrinkage estimator which allows heterogeneous demand responses across industries for each country our results show that price and output elasticities are heterogeneous within the same manufacturing sector across countries furthermore an output contraction due to e g demand shocks will generally have larger negative effects on gas demand than increases in natural gas prices

ghanaian energy economy inter production factors and energy substitution abstract industries in ghana depend highly on petroleum to fuel their operations which has brought immerse environmental threat from greenhouse emission gas ghg this study tried to investigate potential substitutability of factor inputs and fuel inputs among capital labor petroleum and electricity in ghana by adopting the translog production and cost function approach we used ridge regression technique to estimate the parameters after our data show possibility of multicollinearity our result shows that all inputs are substitutes with their relative technological progress also showing evidence of convergence this suggests that redirecting resources into the improvement of technology towards cleaner energy production like electricity will be a success over time and this will mean that the fueling of the economy will be done in a cleaner environment and mitigating mitigate co2 emissions as well the improvement of electricity production and the promotion of its use require government policies that will enable industries to adjust to the switch from one input to the other through capital subsidies and tax rebates also energy labor and capital energy being substitutes in our findings suggest that removal of all energy subsidies will reduce the use of energy and increase capital and labor intensiveness input switch by industries will promote merger of smaller firms with bigger firms that have cost advantage during the switch period and requires a clear government merger control policies in a nutshell our findings provide an insight into policies to promote the use of renewable energy energy intensity and merger policies

modelling state energy consumption abstract econometric models can provide national and state policy makers with frameworks for evaluating past developments and formulating future energy policies this study models energy consumption in the residential commercial industrial and transport sectors of florida own cross price and scale elasticities are estimated for major energy types twenty year forecasts are presented to show how projected relative price changes can be expected to further alter final energy consumption and total primary energy consumption

a regional linear logit fuel demand model for electric utilities we investigate a short term forecasting and simulation model of utility fuel demand based on the linear logit model the forecasting properties of the model are surprisingly good for such a simple econometric model of factor demand the model ignores the distinctive characteristics of electric utilities load curves wheeling etc yet produces remarkably good forecasts at both the national and regional levels because the model is based on neoclassical theory it can be used for simulations making it more useful and less ad hoc than a pure forecasting model

environmental regulations and productivity growth the case of fossil fueled electric power generation this paper measures and analyzes the effect of sulfur dioxide emission restrictions on the rate of productivity growth in the electric power industry over the 1973 79 business cycle a firm specific measure of regulatory intensity is developed which depends on the severity of the emission standard the extent of enforcement and the unconstrained emission rate relevant to each utility the results indicate that emission regulations result in significantly higher generating costs primarily from the increased use of low sulfur fuels the average rate of productivity growth was reduced by 0 59 percentage points per year for constrained utilities

a dynamic analysis of interfuel substitution in u s industrial energy demand using data for 1960 92 to analyze interfuel substitution in the u s industrial sector a dynamic linear logit model is shown to provide superior global properties than a comparable dynamic translog model confirming earlier static results by t j considine 1989 the linear logit model provides a direct unbiased estimate of the rate of dynamic adjustment indicating a median response lag of less than two years excluding fuels used for nonenergy purposes yields larger estimates of the price elasticities for coal and oil and indicates generally greater potential for interfuel substitution than when using aggregate data

unconventional energy taxation and interstate welfare an analysis of pennsylvania s severance tax policy abstract natural gas production from unconventional sources has increased over the past decade a significant portion of this increase has come from output in the marcellus region of pennsylvania this output has altered gas markets and repositioned pennsylvania as a major gas exporter it has also put pennsylvania at odds with other states as it is one of a few without a formal severance tax on extractive resources in this paper we combine results from a structural demand model with a two sector trade model to analyze the interstate welfare impacts of pennsylvania s current severance tax proposal our results demonstrate that most of the welfare losses from this proposed policy are likely to be shifted to residents in other states we also demonstrate how fluctuations in gas prices can substantially reduce tax revenue these findings have important implications for both pennsylvania and u s energy policy given the significant rise in energy production from new sources throughout the u s

a dynamic analysis of interfuel substitution for swedish heating plants abstract this paper estimates a dynamic model of interfuel substitution for swedish heating plants we use the cost share linear logit model developed by considine and mount considine t j mount t d 1984 the use of linear logit models for dynamic input demand systems review of economics and statistics 66 434 443 all estimated own price elasticities are negative and all cross price elasticities are positive the estimated dynamic adjustment rate parameter is small however increasing with the size of the plant and time indicating fast adjustments in the fuel mix when changing relative fuel prices the estimated model is used to illustrate the effects of two different policy changes

substitution between clean and dirty energy inputs a macroeconomic perspective in macroeconomic models the elasticity of substitution between clean and dirty energy inputs within the energy aggregate is a central parameter in assessing the necessary conditions for long run green growth using new sectoral data in a panel of 26 countries we formulate specifications of nested constant elasticity of substitution production functions that allow estimating this parameter for the first time we present evidence that it significantly exceeds unity a favorable condition for promoting green growth

technical change inter factor and inter fuel substitution possibilities in pakistan a trans log production function approach abstract energy consumption in pakistan increased significantly over the last two decades primarily due to industrialization in order to meet the growing energy needs the government adopted short term policies by setting up thermal power projects which are more expensive both in terms of fiscal cost and environmental damages as compared to hydro power projects the former has exposed pakistan to international oil price shocks and environmental degradations this study therefore attempts to analyze technical change using trans log production function by employing non energy factors i e capital and labor and energy factors i e petroleum and natural gas to estimate elasticity of substitution the purpose of the study is to provide policy suggestions to the government on how to achieve high economic growth vis a vis improved energy security and environmental sustainability the results reveal that capital energy and labor energy are substitutes thereby suggesting the need for an increased focus on technological advancement and skilled employment generation to conserve energy and reduce co 2 emission a gradual elimination of energy subsidies which will make energy price reflects its true cost is required to further discourage increased energy consumption and promote capital intensive production methods a scenario analysis based on the elasticity of substitution between capital energy and petroleum gas shows the potential of energy conservation and emission mitigation the results further suggest the importance of a diversified energy supply mix characterized by abundant hydro and other renewable energy resources alongside natural gas

major oecd country industrial sector interfuel substitution estimates 1960 1979 abstract a range of static and dynamic translog based expenditure shares models are estimated for non energy producing industrial sectors of the major seven countries of the oecd area sectoral energy volume and fuel efficiency bias variables are shown to be significant over and above individual prices in explaining individual fuel expenditure shares statistically significant own price and cross price elasticities of demand are presented for individual countries with some magnitudes varying considerably across alternative model specifications

the role of energy conservation and natural gas prices in the costs of achieving california s renewable energy goals abstract this paper develops an econometric forecasting system of energy demand coupled with engineering economic models of energy supply the framework is used to quantify the energy and environmental impacts of renewable and natural gas based electricity power generation in california considering the role of on going energy conservation efforts and incorporating different natural gas price scenarios over the forecast horizon 2011 2035 the results indicate that relative to a business as usual scenario of continuing to rely on imported electricity to meet future demand california s renewable portfolio standard rps of 33 renewables by 2020 will increase electricity rates by over 10 however the rps will also provide substantial annual savings in carbon dioxide emissions equal to 40 million metric tons in 2020 continuing non price induced energy conservation at the historical rate will only result in a marginal reduction in electricity rates although lower electricity use means that substantial savings are nonetheless achieved in electricity expenditures in addition continuing trend energy conservation leads to substantial savings in carbon dioxide emissions like the rps developing domestic natural gas generation also leads to rate increases and reductions in carbon dioxide emissions relative to the baseline however these impacts are minor compared to the rps scenario

interfuel substitution a meta analysis interfuel substitutability has been of longstanding interest to the energy economics and policy community however no quantitative meta analysis has yet been carried out of this literature this paper fills this gap by analyzing a broad sample of studies of interfuel substitution in the industrial sector manufacturing industry or subindustries or macro economy of a variety of developed and developing economies publication bias is controlled for by including the primary study sample size in the meta regression results for the shadow elasticities of substitution between coal oil gas and electricity for forty six primary studies show that at the level of the industrial sector there are easy substitution possibilities between all the fuel pairs with the exception of gas electricity and coal electricity substitution possibilities seem more constrained at the macro level and less constrained in sub industries estimates also vary across countries publication bias does not seem to be present but model and data specification issues very significantly affect the estimates derived by each individual study estimates from cross section regressions are generally largest fixed effects panel estimates intermediate in magnitude and time series estimates are mostly much smaller econometric research suggests that the fixed effects estimates are likely the best among the existing studies though biased downwards

the price and income elasticity of china s natural gas demand a multi sectoral perspective abstract natural gas as a clean low carbon energy will play an important role in the world s low carbon energy transformation in this paper research on the elasticity of natural gas demand is surveyed and it is found that the price and income elasticities of natural gas demand in different sectors are distinctive in particular this paper constructs an autoregressive distribution lag model to study the elasticity of natural gas demand in various sectors of china the results show that except for the residents sector the long run price elasticity of natural gas demand in other sectors is greater than 0 which is contrary to the estimates of developed countries the demand for natural gas is complementary to coal in industrial and power generation sectors which is also different from developed countries the elasticity of natural gas demand in residents sector is lack in price elasticity but abundant in income elasticity which is similar to the developed countries the results also shows that natural gas and oil are substitutes for each other in the transportation sector and natural gas and coal are substitutes for each other in service sector

energy substitution effect on transport sector of pakistan based on trans log production function abstract transport sector because of the growing industrialization and urbanization of pakistan is one of fastest growing sector in terms of output energy consumption and co 2 emission its current performance and future outlook has the potential to leave behind problems related to the global issues of energy security and environmental sustainability the extents to which energy and non energy inputs are substitutable are the core issue in planning and designing of energy policies for this purpose we establish a trans log production function for pakistan transport sector and the input factors capital labor and energy are included output elasticities of each factor and the substitution elasticities between these factors have been estimated and analyzed for the sample period of 1980 2013 the results show higher output elasticity and that all pairs of factor inputs are substitutes because of the higher level of substitution elasticities the results suggest that by allocating more capital in the transport sector the relevant energy saving technology could be promoted thereby realizing the substitution between capital and energy and reduction of co 2 emission as a result it further suggest that by continuous upgrading of the capital substitution between energy and labor can also be achieved and the transition of pakistan transport sector from labor intensive to capital intensive can be realized

the use of linear logit models for dynamic input demand systems this paper demonstrates that a linear logit model with appropriate constraints can be used to specify a system of cost share equations that satisfy neoclassical economic conditions unlike many other flexible functional forms the logistic function is particularly well suited for incorporating dynamic adjustment mechanisms the empirical results suggest that the use of static models overstates short run own price elasticities and understates the corresponding long run price effects

singularity and autoregressive disturbances in linear logit models the implications of including autoregressive disturbances in linear logit models of demand systems are explored it is argued that the normality assumption of the error terms is more appropriate in the linear logit model than in a share equation model with additive disturbances commonly found in the literature autoregressive disturbances and their implications for model estimation are discussed in that context both theoretical arguments and empirical evidence are presented in favor of the logit specification given the presence of serial correlation

information choice and amplification of financial crises we propose an amplification mechanism of financial crises based on the information choices of investors information acquisition makes investors more likely to act against their prior deteriorating public news under an initially strong weak prior increases reduces the value of private information and induces more less information acquisition deteriorating public news increases the probability of a crisis since the initially strong weak prior induces no attacks attacks this effect is amplified with endogenous information choices to enhance financial stability a policy maker affects information acquisition via taxes and subsidies we derive and discuss testable implications for the magnitude of amplification

international evidence on aggregate short run and long run interfuel substitution in this paper we build on recent work by serletis et al 2010 in press and report short and long run estimates of aggregate interfuel substitution for a number of oecd and non oecd countries in doing so we use recent pooled intercountry data since 1980 and state of the art advances in microeconometrics including duality theory and flexible functional forms also motivated by the widespread practice in the empirical energy demand literature of ignoring theoretical regularity we estimate our model subject to global curvature but not monotonicity using methods developed by diewert and wales 1987 we provide inference and also a policy perspective using parameter estimates that are consistent with the theoretical regularity conditions of neoclassical microeconomic theory

economic factors and traffic crashes in new zealand the aim of this study was to examine the changes in the trend and seasonal patterns of fatal crashes in new zealand in relation to changes in economic conditions between 1970 and 1994 the harvey harvey and durbin journal of the royal statistical society 149 3 187 227 1986 structural time series model stsm an unobserved components class of model was used to estimate the quarterly number of fatal traffic crashes independent variables included distance travelled the unemployment rate uer real gross domestic product per capita rgdp the proportion of motorcycles the proportion of young males in the population alcohol consumption per capita the open road speed limit and dummy variables for the 1973 and 1979 oil crises and seatbelt wearing laws distance travelled rgdp uer and alcohol consumption per capita were significant factors in explaining the short run dynamics of fatal crashes with the effect of rgdp greater than uer increases in either rgdp or uer were related with decreas

a pooled dynamic analysis of interfuel substitution in industrial energy demand by the g 7 countries a dynamic version of considine s 1990 linear logit model is used to obtain theoretically consistent estimates of long run price elasticities from pooled intercountry data on industrial energy consumption this model also provides a rare direct estimate of the important rate of dynamic adjustment revealing a median lag of ten years the long run demands for oil and coal are the most elastic and the strongest channels for interfuel substitution are between oil and natural gas with no significant evidence of complementarity between fuels

the cost of solar centric renewable portfolio standards and reducing coal power generation using arizona as a case study abstract this paper develops an econometric forecasting system of energy demand coupled with engineering economic models of energy supply the framework is used to quantify the impact of a state level renewable portfolio standard rps achieved predominately with solar generation we perform the analysis using arizona s rps as a case study over the period 2012 2035 we find if arizona implements its rps when supplying future electricity demand there will be an increase in electricity rates relative to a business as usual scenario of reliance on gas fired generation extending the current regime of tax credits greatly reduces this increase at the taxpayers expense we find that by 2025 arizona s rps will implicitly abate carbon dioxide emissions at a cost between 58 and 82 per metric ton and by 2035 abatement costs are between 22 and 69 per metric ton depending on the future evolution of nature gas prices the rps always leads to a negative impact on social welfare under low gas prices but after 2029 the welfare impact is positive under high gas prices in contrast phasing out arizona s existing coal fired generation always has positive welfare impacts

interfuel substitution in the united states in this paper we use the locally flexible translog functional form to investigate the demand for energy and interfuel substitution in the united states and to provide a comparison of our results with most of the existing empirical energy demand literature motivated by the widespread practice of ignoring theoretical regularity we follow barnett s 2002 suggestions and estimate the model subject to theoretical regularity using methods developed by diewert and wales 1987 and ryan and wales 2000 in an attempt to produce inference consistent with neoclassical microeconomic theory moreover we use the most recent data published by the u s energy information administration eia and in addition to investigating interfuel substitution possibilities in total u s energy demand we follow serletis et al 2009 and also examine interfuel substitution possibilities in energy demand by sector moreover we test for weak separability with the objective of discovering the structure of the functional form in total energy demand as well as energy demand by sector

dynamic translog and linear logit models a factor demand analysis of interfuel substitution in us industrial energy demand abstract we compare and contrast two popular dynamic flexible functional forms for cost functions the translog and the logit j bus econ stat 8 1990 347 353 using data on us industrial energy demand from 1960 to 1992 which has been analysed by previous studies energy econ 11 1989 89 94 appl econ 21 1989 931 945 j bus econ stat 13 1995 459 465 we show the crucial role played by different dynamic formulations of the translog in this analysis of factor demands with respect to rates of dynamic adjustment and substitution possibilities we conclude that the poor performance of the dynamic translog relative to the dynamic logit cannot be explained solely by dynamic model mis specification or the inclusion of price unresponsive non energy fuel use data our most robust empirical result is that coal and oil are substitutes

delving into liberia s energy economy technical change inter factor and inter fuel substitution abstract the industrial energy mix of liberia is dominated by petroleum products this has generated serious environmental problems contributing immensely to co 2 emissions and other pollutants in the country this study has attempted to investigate the potential for inter factor and inter fuel substitution between capital labor petroleum and electricity in liberia by employing a translog production and cost function approach ridge regression procedure has been adopted to estimate the parameters of the function due to multicollinearity in the data estimation results show that all inputs are substitutes these suggest that price based policies coupled with capital subsidy programs can be adopted to redirect technology use towards cleaner energy sources like electricity hence retaining the ability to fuel the economy while also mitigating greenhouse gas ghg emissions substitution between energy and labor and energy and capital implies that removal of price ceilings on energy in liberia would tend to reduce energy use and increase capital and labor intensiveness notwithstanding the study seems to show no evidence of convergence in relative technological progress of the four inputs implying that petroleum will continue to play a dominant role in the energy consumption mix of liberian industry while labor investment will continue to outweigh capital inputs finally the findings of this study provide general insights and underscore the importance of policies that focus on installed capacity of renewable electricity energy intensity targets as well as merger of enterprises

asymmetric substitutability between energy and capital evidence from the manufacturing sectors in 10 oecd countries abstract this paper investigates the substitutability between energy and capital in the manufacturing sectors of ten oecd countries since 1980 by applying a cost function approach that has been widely used to analyze industrial energy demand first we attempt to determine the source of the disagreement in the literature on the substitutability between energy and capital and reach a conclusion regarding the substitutability between energy and capital dividing energy and capital into sub inputs we analyze their substitutability the empirical results indicate that fuel tends to complement capital in most countries whereas electricity and capital are substitutes thus this study confirms that heterogeneity in energy sources is a primary component of the systematic variation in the substitutability between energy and capital second we examine asymmetric substitutability between energy and capital by estimating the morishima elasticity of substitution the estimates of the morishima elasticity of substitution demonstrate that the substitution of energy for capital has dominated the substitution of capital for energy this asymmetric substitutability is natural from the producer perspective because capital costs are much greater than energy costs in most countries these results imply that the adoption of energy saving technologies has not been induced in response to increased energy prices

how do banks adjust to changing input prices a dynamic analysis of u s commercial banks before and after the crisis abstract the 2000 2013 period was characterized by substantial regulatory monetary and technological change especially after the onset of the global financial crisis this study assesses the total impact of these policy shifts and technological changes on u s commercial banks short run and long run substitution elasticities an endogenous break test divides the sample into a pre crisis period and a post crisis period during the former period banks inputs tend to be inelastic substitutes after the onset of the crisis particularly the long run substitutability of most input factors decreases to even lower levels due to changes in both cost technology and economic conditions at the same time banks response to input price changes becomes more sluggish hence especially after the onset of the crisis banks have little flexibility regarding input factor usage and are thus sensitive to input price changes from a cost perspective

confidence intervals for elasticity estimators in translog models this paper examines the distribution fu nctions of elasticity estimators in translog demand models the authors consider the normaland ratio of normals distributions and present confidence intervals for the elasticity estimators the results suggest that only elasticity estimato rs based on the means of the actual cost shares are likely to follow either the normal or ratio of normals distribution function examination of three published empirical studies demonstrates that inferences regarding the values of elasticities cannot be made from point estimates alone and suggests a trade off between the level of aggregation and the width of confidence intervals for the elasticit y estimators copyright 1986 by mit press