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Testing The Induced Innovation Hypothesis: An Application to UK Agriculture, 1953-90

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  • Y. Khatri
  • C. Thirtle
  • R. Townsend

Abstract

This paper exploits the properties of the third order approximation of the translog cosl function lo estimate the input demand elasticities and factor-saving biases of technological change for UK agriculture. Then, cointegration techniques are used to determine the time series properties of the variables, eslablish cointegration and test for causality. The tests show that the single bias, single relative price approach, applied to the cumulative biases in previous tests, is inappropriate. Maximum likelihood techniuues show that cointegrating vectors exist and that the input prices are negatively related to the biases, as required by the hypothesis. The prices are causally prior to the biases, but for crop inputs there is also reverse causality.

Suggested Citation

  • Y. Khatri & C. Thirtle & R. Townsend, 1998. "Testing The Induced Innovation Hypothesis: An Application to UK Agriculture, 1953-90," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 6(1), pages 1-28.
    • Handle: RePEc:taf:ecinnt:v:6:y:1998:i:1:p:1-28
    DOI: 10.1080/10438599800000011
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    References listed on IDEAS

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    1. Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275.
    2. Hicks, John, 1977. "Economic Perspectives: Further Essays on Money and Growth," OUP Catalogue, Oxford University Press, number 9780198284079, Decembrie.
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    Cited by:

    1. Esposti, Roberto & Pierani, Pierpaolo, 2008. "Price-induced technical progress in Italian agriculture," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 89(4).
    2. Baldi, Lucia & Casati, Dario, 2005. "Induced Innovation in Italy: An Error Correction Model for the Period 1968-2002," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24590, European Association of Agricultural Economists.
    3. Pardey, Philip G. & Alston, Julian M. & Ruttan, Vernon W., 2010. "The Economics of Innovation and Technical Change in Agriculture," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 939-984, Elsevier.
    4. Shumway, C. Richard & Liu, Yucan, 2006. "Induced Innovation in the Agricultural Sector: Evidence From a State Panel," 2006 Annual meeting, July 23-26, Long Beach, CA 21089, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Nagase, Yoko & Uehara, Takuro, 2011. "Evolution of population-resource dynamics models," Ecological Economics, Elsevier, vol. 72(C), pages 9-17.
    6. Orachos Napasintuwong Artachinda, 2011. "Modeling Directions of Technical Change in Agricultural Sector," Working Papers 201101, Kasetsart University, Department of Agricultural and Resource Economics.

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