Author(s): Wang Ning, Shi Jinchuan, College of Economics, Zhejiang University, Faculty of Social Sciences, Zhejiang Radio and Television University
Pages: 149-161
Year: 2015 Issue:  9
Journal: The Journal of Quantitative & Technical Economics
Keyword:  Factor price; Distortion; Measurement;
Abstract: Factor price distortion refers to the factor price structure cannot reflect the relative abundance of resources accurately.By measuring the marginal productivity of each factor,and contrasting to the actual price of each factor,the degree of distortion can be measured directly.The paper compares and analyzes the measure results of factor price distortion in China from the literature research,and finds out the main reasons for the differences.On this basis,a time-varying elasticity production function model is established to measure the degree of Chinese overall economic factor price distortions.The measure results show that the share of factor has a relative stability in our country over a long period of time,the prices of capital and labor all have negative distortions,and most of the time,the distortion degree of capital is higher than labor.