Talk:Elasticity of substitution

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This post does not make it clear that the MRS is the ratio of the marginal utilities WRT the two goods, so it would benefit from clarification of the notation.

[edit] Missing a Minus?

I believe the definition of elasticity of substitution typically includes a minus sign. That is, I think for two goods xi and xj and utility function u that the definition ought to be

\xi_{ij}=-\frac{\partial\ln(x_i/x_j)}{\partial\ln(u_i/u_j)}

where u_i=\frac{\partial u}{\partial x_i} as per MWG page 97. However, I may be wrong, or there may be notational differences, so I'm writing here instead of just making the change on the page.Coleca 06:13, 13 May 2007 (UTC)