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Numerical Estimation of Agricultural Supply Functions - A Micro Economic Approach based on Mathematical Programming

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Rasmussen, S.
Damgaard, M.

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Abstract

This paper describes a cost function approach to modelling production and resource use at the level of the individual farm firm. The procedure for deriving the supply function using mathematical programming under fairly general condition of a convex input set is shown, and the model is demonstrated. It is suggested that the model is used as the basic building block in agricultural sector models, the advantage being that the technology is modelled as a production frontier providing better opportunities for modelling input and output substitution.

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Paper provided by European Association of Agricultural Economists in its series 2008 International Congress, August 26-29, 2008, Ghent, Belgium with number 44181.

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Date of creation: 2008
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Handle: RePEc:ags:eaae08:44181

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Related research
Keywords: Cost function; linear programming; economies of scale; agricultural sector models; production frontier; Farm Management;

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  1. Helming, John & Surry, Yves, 2005. "A Sectoral Model for Analyzing Alternative Technologies in Pig Farming," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24774, European Association of Agricultural Economists. [Downloadable!]
  2. Balmann, Alfons, 1997. "Farm-Based Modelling of Regional Structural Change: A Cellular Automata Approach," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 24(1), pages 85-108.
  3. Berger, Thomas, 2001. "Agent-based spatial models applied to agriculture: a simulation tool for technology diffusion, resource use changes and policy analysis," Agricultural Economics, Blackwell, vol. 25(2-3), pages 245-260, September. [Downloadable!] (restricted)
  4. Happe, Kathrin, 2004. "Agricultural policies and farm structures - Agent-based modelling and application to EU-policy reform," Studies on the Agricultural and Food Sector in Central and Eastern Europe 14945, Institute of Agricultural Development in Central and Eastern Europe (IAMO). [Downloadable!]
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