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This is a list of production functions that have been used in the economics literature. Production functions are a key part of modelling national output and
national income A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including gross domestic product (GDP), gross national product (GNP), net national income (NNI), and adjusted nati ...
. For a much more extensive discussion of various types of production functions and their properties, their relationships and origin, see Chambers (1988) and Sickles and Zelenyuk (2019, Chapter 6). The production functions listed below, and their properties are shown for the case of two factors of production,
capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used f ...
(K), and labor (L), mostly for heuristic purposes. These functions and their properties are easily generalizable to include additional factors of production (like land, natural resources, entrepreneurship, etc.)


Technology

There are three common ways to incorporate technology (or the efficiency with which factors of production are used) into a production function (here ''A'' is a scale factor, ''F'' is a production function, and ''Y'' is the amount of physical output produced): * Hicks-neutral technology, or "factor augmenting": \ Y = AF(K,L) * Harrod-neutral technology, or "labor augmenting": \ Y = F(K,AL) * Solow-neutral technology, or "capital augmenting": \ Y = F(AK,L)


Elasticity of substitution

The elasticity of substitution between factors of production is a measure of how easily one factor can be substituted for another. With two factors of production, say, ''K'' and ''L'', it is a measure of the curvature of a production isoquant. The mathematical definition is: :\ \epsilon=\left frac \frac \right where "slope" denotes the slope of the isoquant, given by :\ slope=-\frac .


Returns to scale

Returns to scale In economics, returns to scale describe what happens to long-run returns as the scale of production increases, when all input levels including physical capital usage are variable (able to be set by the firm). The concept of returns to scale arises ...
can be * Increasing returns to scale: doubling all input usages more than doubles output. * Decreasing returns to scale: doubling all input usages less than doubles output. * Constant returns to scale: doubling all input usages exactly doubles output.


Some widely used forms

* Constant elasticity of substitution (CES) function: :: Y = A alpha K^\gamma + (1-\alpha) L^\gamma , with \gamma \isin \infty,1/math> ::which includes the special cases of: ::*Linear production (or perfect substitutes) ::::\ Y=A alpha K+ (1-\alpha) L/math> when \ \gamma=1 ::* Cobb–Douglas production function (or imperfect complements) ::::\ Y=AK^\alpha L^ when \gamma \to 0 ::* Leontief production function (or perfect complements) ::::\ Y=\text ,L/math> when \gamma \to -\infty * Translog, a linear approximation of CES via a Taylor polynomial about \gamma = 0 ::\ln(Y)=\ln(A)+a_L \ln(L)+a_K \ln(K)+b_\ln^2(L) + b_ \ln(L) \ln(K) + b_ \ln^2(K) * Stone-Geary,a variation of the Cobb-Douglas production function that considers existence of a threshold factor requirement (represented by z) of each output ::Y=A\prod_^n(x_i-z_i)^


Some Exotic Production Functions

*Variable Elasticity of Substitution Production Function (VES) ::Y=AK^ +baK *Transcendental Production Function DECISION ASPECTS OF THE SPILLMAN PRODUCTION FUNCTION Janusz Jaworski 1977 https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1744-7976.1977.tb02884.x ::Y=Ae^K^L^ *Constant Marginal Value Share (CMS) ::Y=AK^L^-mL *Spillman Production Function (This function is referenced in Agricultural Economics Research) ::y=m- A \prod_^n a_i^ *von Liebig Production Function ::Y=\min\ ::where Y^* is the maximal yield (considers capacity limits).


References

{{reflist Production economics Economics lists