Technological Change And Input Substitution Possibilities In Pakistan’S Agriculture

This study examines how the use of new technologies has affected substitution among inputs and technological bias. The values of the pair-wise substitution elasticities and demand elasticities are determined by jointly estimating with IZEF, the parameters of the cost and share equations derived from a translog cost function. Time series regressions show that in the pre-Green Revolution period land and labour were strong substitutes for each other but they were weak substitutes for working capital. While the fixed capital was a weak substitute for land and working capital,lt was a good substitute for labour. After the Green Revolution era, land and labour continued to be strong substitutes for each other but working capital and fixed capital turned strong complements and the fonner also became a good substitute for land and the latter a weak substitute for labour. Next, the pre-Green Revolution neutral technological bias with respect to fixed and working capital later led to land and labour savings. The results show that intensity of capital in domestic agriculture is on the increase and the dynamics of the new technological and not even the rising input prices have caused the technological bias observed in the analysis.