The purpose of this paper is to evaluate the performance of neoclassical cost functions in estimating input substitution. In contrast to earlier studies, this analysis assumes that the "true" technology is represented by each of three large-scale, engineering, process analysis models....

This note clarifies the role of regulation for induced technical change. Rate base regulation will affect the firm's innovational choices and may serve to reinforce static misallocation effects. However, the actual pattern induced in the presence of regulation must be considered an empirical...

The purpose of this paper is to extend the Averch-Johnson model of the regulated firm so as to allow for the endogenous selection of factor augmenting technical change. A simple model is developed which avoids the questions of timing, capitalization, and internalization of innovations and...