Abstract
AbstractA declining labor share in agriculture is consistent with an elasticity of substitution between labor and other factors greater than unity. Using cross‐section data drawn from a small sample of Colombian crop farms, this study develops a three‐factor model and estimates the Allen‐Uzawa partial substitution elasticities between the factor‐pairs land, labor, and farm machinery. Both Ordinary and Generalized Least Squares estimation procedures provide elasticity estimates that agree with each other and with the results of recent and related research: a substitution elasticity between labor and machinery (capital) of about one and a half is strongly indicated.
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