ABSTRACT
Estimates of the aggregate production function are dependent upon the industrial mix and structure in each region and it is not clear whether these estimates can be compared between regions or between years. Nor is it clears, at least in an econometric sense, how such results are to be interpreted. The estimates of scale economies also serve to further emphasize the absence of any evidence warranting a claim of increasing returns in the South and constant returns elsewhere, especially in New England such as is implicit in the Russel-Linden-Genovese hypothesis. he increase in the capital-labor ratio implicit in these figures for William Gregg's factory reflected the general trend between 1850 and 1860 towards the use of less labor intensive methods and the substitution of capital for labor. The national estimate implies that labor's share should have increased slightly too approximately 45 percent of total costs by 1860.
