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Defining elasticities for PMP models by estimating marginal cost functions based on FADN Data - the case of Swiss dairy production

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  • Mack, Gabriele
  • Mann, Stefan

Abstract

The Swiss agricultural sectoral information and forecasting system (SILAS) is based on the PMP standard approach. The marginal cost functions are estimated by exogenous elasticities. Due to the lack of empirical data the elasticities were set for all activities to unity. Based on total milk production costs of FADN farms, regional supply functions were estimated. The results are used to adjust the marginal cost functions of organic and non-organic dairy cow activities in the model SILAS to the empirically estimated functions. The results show that the marginal cost functions in the sectoral model are in general a bit steeper than in the FADN estimations, when elasticities by the value one are applied. Major differences between organic and non-organic milk production could not be observed. Adjusting the slope of the marginal cost functions to the empirically estimated ones leads to slightly different forecast results. Mainly the number of organic cows is higher in the FADN adjusted scenario than in the reference scenario without any adjustments.

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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 6694.

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Date of creation: 2008
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Handle: RePEc:ags:eaa107:6694

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Related research

Keywords: Marginal cost function; milk production costs; PMP-based sectoral model; Demand and Price Analysis; Livestock Production/Industries;

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  1. Howitt, Richard E., 2005. "PMP Based Production Models-Development and Integration," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24484, European Association of Agricultural Economists.
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Cited by:
  1. Bahta, Sirak Teclemariam & Berner, Anja & Offermann, Frank, 2011. "Estimation of Commodity Specific Production Costs Using German Farm Accountancy Data," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114233, European Association of Agricultural Economists.
  2. Tiberti, M., 2013. "Production costs of Soft Wheat in Italy," 2013 Second Congress, June 6-7, 2013, Parma, Italy 149898, Italian Association of Agricultural and Applied Economics (AIEAA).

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