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- W2072093086 abstract "Variations in regional institutional factors lead to differences among regional production structures. This implies that manufacturers' response to input price changes will vary from region to region. This paper quantifies these responses by estimating Marshallian input demand functions using a non-homothetic indirect production function. The model allows us to incorporate both the substitution effect and output effect of an input price change. Previous studies quantify the comparative-static effect of a change in input prices on regional input demand by estimating output-constant demand functions which indicate only the substitution effect. Our estimated model is used to simulate the effect of a change in the interest rate and the unionization rate on the relative magnitude of regional input utilization. The study concludes that a given change in an input price will have a greater impact on southern manufacturers than on the northern manufacturers. We also find that the output effect in the North accounts for a larger fraction of the total effect of an input price change. The simulations show that capital formation in the South is more sensitive to changes in the interest rate." @default.
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- W2072093086 date "1992-06-01" @default.
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- W2072093086 title "A regional comparison of the impact of changes in input prices on input demand for U.S. manufacturing" @default.
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- W2072093086 doi "https://doi.org/10.1016/0166-0462(92)90012-p" @default.
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