Measurement of the Elasticity of Factor Substitution and Bias of Technical Change* *Research on this paper was supported in part by National Science Foundation Grant GS-786. During part of the writing of this paper, Diamond received financial support from the Social Science Research Council and the Guggenheim Foundation. An earlier version was presented at the Econometric Society meetings, New York, 1965. The authors are indebted to Dr. Perry Shapiro for helpful discussions of several points in this paper.