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D. Diewert (Generalized Leontief) Production Function
where L = labour, K = capital, M = materials and supplies, q = product, and nu = elasticity of scale parameter.
where L = labour, K = capital, M = materials and supplies, and q = product. The parameter nu is a measure of the economies of scale, while the parameter rho yields the elasticity of substitution: sigma = 1/(1 + rho).
The estimated coefficients of the Diewert production and cost functions will vary with the parameters sigma, nu, alpha, beta and gamma of the CES production function.