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Modeling Supply Response in a Multiproduct Framework

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  • V. Eldon Ball

Abstract

The paper models multiproduct supply response in agriculture and tests key assumptions traditionally maintained in supply response studies. The technology is approximated by a restricted profit function. The properties of the restricted profit function are imposed during estimation. The hypothesis that maintains the existence of output price and quantity indexes that satisfy the adding-up property is rejected. The existence of individual production functions for each output is also rejected. Unless joint production is permitted, the estimates of responsiveness of a particular commodity to changes in own price or prices of competing outputs are likely to be considerably understated.

Suggested Citation

  • V. Eldon Ball, 1988. "Modeling Supply Response in a Multiproduct Framework," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(4), pages 813-825.
    • Handle: RePEc:oup:ajagec:v:70:y:1988:i:4:p:813-825.
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    File URL: http://hdl.handle.net/10.2307/1241922
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