Elasticity of complementarity
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Elasticity of complementarity (Hamermesh, 1993) is the percentage responsiveness of relative factor prices to a 1 percent change in relative inputs.
Mathematical definition
Summarize
Perspective
Given the production function then the elasticity of complementarity is defined as
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
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