 # Homogeneous of degree zero Home  Site Map  Add Term  Search  About Us  Contributors # Homogeneous of degree zero

The property of a function that, if you scale all arguments by the same proportion, the value of the function does not change. See homogeneous of degree X. In the H-O Model, CRTS production functions imply that marginal products have this property, which is critical for FPE.

# Homogeneous product

Homogeneous product

The product of an industry in which the outputs of different firms are indistinguishable. Contrasts with differentiated product.

# Homogeneous expectations assumption

Homogeneous expectations assumption

An assumption of Markowitz portfolio construction that investors have the same expectations with respect to the inputs that are used to derive efficient portfolios: asset returns, variances, and covariances.

# Homogeneous of degree X

Homogeneous of degree X

A homogeneous function where the monotonic function is the constant raised to the exponent X: F(lV)=lXF(V). For X>1, see increasing returns to scale; for X<1, see decreasing returns to scale.

# Homogeneous function

Homogeneous function

A function with the property that multiplying all arguments by a constant changes the value of the function by a monotonic function of that constant: F(lV)=g(l)F(V), where F(·) is the homogeneous function, V is a vector of arguments, l>0 is any constant, and g(·) is some strictly increasing positive function. Special cases include homogeneous of degree X and linearly homogeneous.

# Linearly homogeneous

Linearly homogeneous

Homogeneous of degree 1. Sometimes called linear homogeneous.

# Further Suggestions

Homogeneous of degree 1
First degree homogeneous
Zero degree homogeneous
Homogeneous