Factor Costs and Factor Use: An Analysis of Labor, Capital, and Natural Resource Inputs

A NEOCLASSICAL FRAMEWORK IS APPLIED TO ANALYZE TRENDS IN THE USAGE OF LABOR, CAPITAL, AND RESOURCE INPUTS WITHIN SEVERAL RESOURCE-INTENSIVE INDUSTRIES. THE BROAD PICTURE SHOWS A SUBSTITUTION OF RESOURCE INPUTS AND CAPITAL AGAINST LABOR. THE LONG-RUN ESSENTIALITY OF LABOR HAS PLAINLY BEEN REDUCED IN EACH INDUSTRY THROUGH TECHNICAL FACTOR SUBSTITUTION. SINCE THIS PROCESS IN REVERSIBLE, CURRENT AND PROSPECTIVE RESOURCE SHORTAGES CAN BE PARTIALLY OFFSET BY DIRECT SUBSTITUTION AGAINST RESOURCE INPUTS. THIS CONCLUSION IS BASED ON ELASTICITIES EVALUATED AT SAMPLE MEANS OF THE REGRESSORS. THIS STUDY FOCUSES DELIBERATELY ON INDUSTRIES DISTINGUISHED BY INTENSIVE DIRECT CONSUMPTION OF RESOURCE INPUTS. THE REDUCTION OF MICRO-ESSENTIALITY THROUGH INPUT SUBSTITUTION IS AN IMPORTANT KEY TO THE ALLEVIATION OF MACRO-ESSENTIALITY. TABLES. EQUATIONS. REFERENCES. APPNDIX.