Mixed partial elasticities in constant returns-to-scale production technologies

Recently, Podinovski and Førsund (2010) developed a linear programming approach to the analysis and calculation of a class of mixed partial elasticity measures in variable returns-to-scale (VRS) production technologies. In the current paper, we extend their approach to the constant returns-to-scale (CRS) technologies and formulate linear programs required for the computation of elasticity measures. Among other results obtained in this paper, we prove a new result, valid in both VRS and CRS technologies, that allows us to identify the reason why the corresponding elasticity measure is undefined at the unit. This removes the need for a preliminary sorting of the units into those units where the elasticity measure applies and those where it does not.

► Elasticity measures are extended from variable to constant returns-to-scale models. ► Special cases of elasticity measures are evaluated. ► Linear programming techniques are used for the calculations.