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Estimating input allocation for farm supply models

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  • Gocht, Alexander
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    Abstract

    When building an economic model for supply analysis the aim is to model a decision making process of one or more agents which fits the observed practice as good as possible. Hereby the modeller is often confronted with incomplete information about the production process; particular crop specific input data are rarely available. The problem of defining activity related technology inputs coefficients is not new. A good deal of literature comes from the mathematical programming perspective, where input coefficients were estimated using a standard linear regression function to fully represent the mathematical program. However this approach is a pure technical device and may result in an inconsistent model. The author of the paper wants to investigate whether it is possible, employing proper estimation techniques, to simultaneously estimate all unknown coefficients of a mathematical farm supply model. This includes the estimation of parameters of the non linear cost function, used to calibrate and catch the simulation behaviour and the crop specific input coefficients. It is shown that a simultaneous estimation of all parameters improves the goodness of fit of the estimated parameters and that such an approach is technically feasible.

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    Bibliographic Info

    Paper provided by European Association of Agricultural Economists in its series 107th Seminar, January 30-February 1, 2008, Sevilla, Spain with number 6469.

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    Date of creation: 2008
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    Handle: RePEc:ags:eaa107:6469

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    Related research

    Keywords: farm supply model; input allocation; entropy; HDP; Research Methods/ Statistical Methods;

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    1. Hasenkamp, Georg, 1976. "A study of multiple-output production functions : Klein's railroad study revisited," Journal of Econometrics, Elsevier, vol. 4(3), pages 253-262, August.
    2. Asunka, Samuel & Shumway, C. Richard, 1996. "Allocatable Fixed Inputs And Jointness In Agricultural Production: More Implications," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 25(2), October.
    3. Guyomard, Herve & Baudry, Marc & Carpentier, Alain, 1996. "Estimating Crop Supply Response in the Presence of Farm Programmes: Application to the CAP," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 23(4), pages 401-20.
    4. Shumway, C. Richard, 1995. "Recent Duality Contributions In Production Economics," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(01), July.
    5. Miller, Douglas & Lence, Sergio H., 1998. "Estimation of Multi-Output Production Functions with Incomplete Data: A Generalized Maximum Entropy Approach," Staff General Research Papers 1219, Iowa State University, Department of Economics.
    6. Yves Léony & Ludo Peeters & Maurice Quinqu & Yves Surry, 1999. "The Use of Maximum Entropy to Estimate Input-Output Coefficients From Regional Farm Accounting Data," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(3), pages 425-439.
    7. Jeroen Buysse & Bruno Fernagut & Olivier Harmignie & Bruno Henry de Frahan & Ludwig Lauwers & Philippe Polomé & Guido Van Huylenbroeck & Jef Van Meensel, 2007. "Farm-based modelling of the EU sugar reform: impact on Belgian sugar beet suppliers," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 34(1), pages 21-52, March.
    8. A. Moxey & R. Tiffin, 1994. "Estimating Linear Production Coefficients From Farm Business Survey Data: A Note," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(3), pages 381-385.
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