Cobb-Douglas production function

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Cobb-Douglas production function

a particular physical relationship between OUTPUT of products and FACTOR INPUTS (LABOUR and CAPITAL) used to produce these outputs. This particular form of the PRODUCTION FUNCTION suggests that where there is effective competition in factor markets the ELASTICITY OF TECHNICAL SUBSTITUTION between labour and capital will be equal to one; that is, labour can be substituted for capital in any given proportions, and vice-versa, without affecting output.

The Cobb-Douglas production function suggests that the share of labour input and the share of capital input are relative constants in an economy, so that although labour and capital inputs may change in absolute terms, the relative share between the two inputs remains constant. See PRODUCTION POSSIBILITY BOUNDARY, CAPITAL-LABOUR RATIO, PRODUCTION FUNCTION, CAPITAL-INTENSIVE FIRM/ INDUSTRY, ISOQUANT CURVE, ISOQUANT MAP.

References in periodicals archive ?
Una forma funcional usada frecuentemente para el caso de la produccion agricola es la Cobb-Douglas:
The well-known Cobb-Douglas production function is amazingly useful in clarifying that growth rates are the sum of three factors: the labor force growth rate, the capital growth rate and the Total Factor Productivity (TFP) growth rate, which is measured as a residual after the labor and capital growth rates have been subtracted from the total economic growth rate.
Two functional forms, the Cobb-Douglas and Translog functional, have been specified by previous studies.
linear production function, Cobb-Douglas production function and Surmounting logarithm production function.
It introduces the Cobb-Douglas production function, the Solow model of economic growth, and the Romer model and the economics of ideas, while looking at the labor market and discussing inflation and the quantity theory of money.
The proposed functional form of Cobb-Douglas stochastic frontier production function has country effects that are assumed to be distributed as half normal random variables and, also, are permitted to vary systematically with time.
Third, we develop a DEA-based methodology based on the Cobb-Douglas function as presented by the units-invariant multiplicative model of Charnes, Cooper, Seiford, and Stutz (1983).
Generally, two types of model (Cobb-Douglas or Translog) are used in the SFA analysis.
Today, the Cobb-Douglas function was proved to be a tool of geographical analysis because geographical systems are always associated with economic systems [2, 3].
Si la funcion de produccion de bienes finales es del tipo Cobb-Douglas [[[rho].sub.t] [flecha diestra] 0), es posible ver que la brecha salarial depende tan solo de las tasas impositivas y de la importancia relativa de los distintos tipos de capital humano en la generacion de bienes finales (ecuacion 19).
With this methodological structure in use, the functional form chosen for estimating the production frontier was a Cobb-Douglas function.
Solution of Cobb-Douglas model in Mathematical Models