Econometrica: Jan 1977, Volume 45, Issue 1

Ray-Homothetic Production Functions

https://doi.org/0012-9682(197701)45:1<133:RPF>2.0.CO;2-9
p. 133-146

Rolf Fare, Ronald W. Shephard

The notion of homotheticity is extended for production correspondences to span many special structures, with properties such as homogeneity, global homotheticity, semi-homogeneity, quasi-homogeneity, with a scaling law common to these structures which is also equivalent to linear expansion paths, thereby showing by comparison the generality of the latter. In these terms one may consider output-mix-dependent factor price deflation of cost and input-mix-dependent output price deflation of revenue.

Log In To View Full Content

Back