| Abstract | Based upon literature review and to address the intensive dispute and widely diversifying measurement result of technical progress, criterion rationale and constant technology condition is proposed in this paper with regard to the definition of technical progress, the form of the production function and measurement approaches. Theoretical issues such as scale economy, factor income share are examined. The constant scale economy assumption is an expression of the standard consistency, while the existing determination method of factor elasticity by income share is dubious because of its inhabitance of transient market effect and hence implication of double standard. A new approach of output elasticity determination on benchmark basis is proposed, i.e, the product of capital/output ratio and long term equilibrium rate of return as capital output elasticity, and its residual between 1 be taken as labor output elasticity. Because of the special nature of factor market and imperfect statistics in developing countries as well as in transition economies, the existing factor elasticity determination methods lead to a seriously over-estimated capital elasticity, and hence a seriously under-valued residual, while by the approach in this paper the residual increases overwhelmingly. |