Induced Innovation in U.S. Agriculture: Time-series, Direct Econometric, and Nonparametric Tests
AbstractThe hypothesis of induced innovation is tested for U.S. agriculture using a high-quality state-level panel data set and three disparate testing techniques – time series, direct econometric, and nonparametric. We find little support for the hypothesis. That conclusion is robust across testing techniques. However, as with all empirical tests of this hypothesis conducted to date, ours focus only on the demand side of the hypothesis. The hypothesis could have been rejected simply because the marginal cost of developing and implementing input-saving technologies for the relatively expensive inputs is greater than for the relatively cheap inputs.
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Bibliographic InfoPaper provided by School of Economic Sciences, Washington State University in its series Working Papers with number 2008-3.
Length: 42 pages
Date of creation: May 2008
Date of revision:
econometric; induced innovation; nonparametric; time series; 2-stage CES;
Other versions of this item:
- Yucan Liu & C. Richard Shumway, 2009. "Induced Innovation in U.S. Agriculture: Time-series, Direct Econometric, and Nonparametric Tests," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 224-236.
- NEP-AGR-2009-01-03 (Agricultural Economics)
- NEP-ALL-2009-01-03 (All new papers)
- NEP-INO-2009-01-03 (Innovation)
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