Econometrica: Jan 1977, Volume 45, Issue 1
Ray-Homothetic Production Functions
Rolf Fare, Ronald W. ShephardThe notion of homotheticity is extended for production correspondences to span many special structures, with properties such as homogeneity, global homotheticity, semi-homogeneity, quasi-homogeneity, with a scaling law common to these structures which is also equivalent to linear expansion paths, thereby showing by comparison the generality of the latter. In these terms one may consider output-mix-dependent factor price deflation of cost and input-mix-dependent output price deflation of revenue.
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