An Atemporal Microeconomic Theory and an Empirical Test of Price-Induced Technical Progress

UC Davis Agricultural and Resource Economics Working Paper No. 04-009

32 Pages Posted: 1 Nov 2004

See all articles by Michael R. Caputo

Michael R. Caputo

University of Central Florida - College of Business Administration - Department of Economics

Quirino Paris

University of California, Davis - Department of Agricultural and Resource Economics

Date Written: October 2004

Abstract

An exhaustive comparative statics analysis of a general price taking cost-minimizing model of the firm operating under the influence of price-induced technical progress is carried out from a dual vista. The resulting refutable implications are observable and thus amenable to empirical verification, and take on the form of a symmetric and negative semidefinite matrix. Using data from individual cotton gins in California's San Joaquin Valley, we empirically test the complete set of implications of the price-induced technical progress theory using both classical and Bayesian statistical procedures. We find that the data are fully consistent with the atemporal, costminimizing, price-induced microeconomic theory of technical progress.

Keywords: Price-induced technical progress, comparative statics

JEL Classification: C60, D21

Suggested Citation

Caputo, Michael R. and Paris, Quirino, An Atemporal Microeconomic Theory and an Empirical Test of Price-Induced Technical Progress (October 2004). UC Davis Agricultural and Resource Economics Working Paper No. 04-009, Available at SSRN: https://ssrn.com/abstract=611911 or http://dx.doi.org/10.2139/ssrn.611911

Michael R. Caputo

University of Central Florida - College of Business Administration - Department of Economics ( email )

Orlando, FL 32816-1400
United States

Quirino Paris (Contact Author)

University of California, Davis - Department of Agricultural and Resource Economics ( email )

One Shields Avenue
Davis, CA 95616
United States
530-752-1528 (Phone)
530-752-5614 (Fax)

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