IZA DP No. 2712: A Note on Allen-Uzawa Partial Elasticities of Substitution: The Case of the Translog Cost Function
revised version published in: Applied Economics Letters, 2009, 16 (11), 1165 - 1169
This note provides a useful property of the Allen-Uzawa partials for the translog cost function. It also suggests how the main results extend to any functional form with certain properties. The curvature of the Allen-Uzawa matrix is the same as the curvature of the Hessian matrix. Intuitively and empirically, the Allen-Uzawa partials allow for the verification of curvature properties.