Our findings also suggest that a failure to normalize the production function leads to a substantial upward bias in the estimated elasticity. We employ nonlinear techniques to correct for publication bias, which is responsible for at least half of the overall reduction in the mean elasticity from 0.9 to 0.3. A production function of the form F(K,L) AKalpha L 1-alpha where K is capital, L is labor, and A and alpha are parameters. The production function solved by them is p KL. Assume A 40, a 0.3 and b 0.7, K 3 and L 5. Such a production function is known as a Cobb-Douglas production function. Let us take up an example to understand the calculations involved in the cobb-Douglas function. Douglas Production Function Constant Elasticity of Substitution Thus, it is a comprehensive function that involves different activities ranging from the production of output from the given inputs and its distribution by. At first the two economists have applied their principle to American manufacturing industry. Another way of expressing Cobb- Douglas production function is: Q AKa L1-a. Fixed Proportion Production Function Variable Proportion Production Function Linear Homogeneous Production Function Cobb. This is similar to linear homogeneous production function showing constant returns to scale. To obtain this result, we collect 3,186 estimates of the elasticity reported in 121 studies, codify 71 variables that reflect the context in which researchers produce their estimates, and address model uncertainty by Bayesian and frequentist model averaging. The Cobb Douglas production function had 3/4 contribution of labor and 1/4 contribution of capital. The mean elasticity conditional on the absence of publication bias, disaggregated data, and inclusion of information from the first-order condition for capital is 0.3. We show that the large elasticity of substitution between capital and labor estimated in the literature on average, 0.9, can be explained by three factors: publication bias, use of aggregated data, and omission of the first-order condition for capital.

Cobb douglas production function