Model of Production with Supply Management for the Canadian Agricultural Sector, A
AbstractThe production structure of the Canadian agricultural sector is modeled by an output-constrained multiproduct profit function to account for the existence of supply management policies. The le Chatelier effects of supply constraints are illustrated, and the comparative statics of supply management is shown to depend, under input normality, on the type of jointness. Convexity is tested and accepted, and nonjointness is rejected by the estimated normalized quadratic profit function. The results support the hypothesis of nonjointness due to allocatable fixed factors. Decreasing the supply of managed commodities will increase the supply of unrestricted commodities, while total input use is reduced.
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 11269.
Date of creation: 01 May 1988
Date of revision:
Publication status: Published in American Journal of Agricultural Economics, May 1988, vol. 70 no. 2, pp. 318-329
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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
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Web page: http://www.econ.iastate.edu
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