IDEAS home Printed from https://ideas.repec.org/a/ags/ajaeau/22482.html
   My bibliography  Save this article

Factor Substitution In Australian Agriculture

Author

Listed:
  • Vincent, David P.

Abstract

Studies of the ease of substitution between inputs in production have generally been carried out within a production framework of an explicit functional form. In this study, a somewhat different approach is followed. A model of derived demand for primary factors of production, land, labour and capital is formulated to enable inferences to be made about the characteristics of the unspecified production function. The model is used to obtain estimates of the pairwise Allen-Uzawa substitution elasticities which are secondary parameters of the underlying production function. The reported FIML estimates from aggregate time series data for the period 1920/21 to 1969/70 indicate very low and marginally different substitution elasticities between different pairs of factors, suggesting that both the Cobb-Douglas and CES production function specifications for the Australian agricultural sector are inappropriate.

Suggested Citation

  • Vincent, David P., 1977. "Factor Substitution In Australian Agriculture," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(2), pages 1-11, August.
    • Handle: RePEc:ags:ajaeau:22482
    DOI: 10.22004/ag.econ.22482
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/22482/files/21020119.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.22482?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Theodore P. Lianos, 1971. "The Relative Share of Labor in United States Agriculture, 1949–1968," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 53(3), pages 411-422.
    2. Binswanger, Hans P, 1974. "The Measurement of Technical Change Biases with Many Factors of Production," American Economic Review, American Economic Association, vol. 64(6), pages 964-976, December.
    3. Duncan, Ronald C., 1972. "Technological Change In The Arid Zone Of New South Wales," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 16(1), pages 1-12, April.
    4. Hendry, D F, 1971. "Maximum Likelihood Estimation of Systems of Simultaneous Regression Equations with Errors Generated by a Vector Autoregressive Process," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 12(2), pages 257-272, June.
    5. Fishelson, Gideon, 1974. "Relative Shares of Labor and Capital in Agriculture: A Subarid Area Israel, 1952-1969," The Review of Economics and Statistics, MIT Press, vol. 56(3), pages 348-352, August.
    6. Ryan, James G. & Duncan, Ronald C., 1974. "Effects On Farm Incomes And Rural Labour Of A Relative Increase In Wages," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 18(3), pages 1-15, December.
    7. Ronald C. Duncan, 1972. "Technological Change In The Arid Zone Of New South Wales," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 16(1), pages 22-33, April.
    8. Pan A. Yotopoulos, 1967. "From Stock to Flow Capital Inputs for Agricultural Production Functions: A Microanalytic Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 49(2), pages 476-490.
    9. Hanoch, Giora, 1971. "CRESH Production Functions," Econometrica, Econometric Society, vol. 39(5), pages 695-712, September.
    10. Johnson, R W M, 1972. "Efficiency Growth in N. Z. Agriculture: A Review," The Economic Record, The Economic Society of Australia, vol. 48(121), pages 76-91, March.
    11. Zvi Griliches, 1960. "Measuring Inputs in Agriculture: A Critical Survey," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 42(5), pages 1411-1427.
    12. Luther G. Tweeten, 1969. "Theories Explaining the Persistence of Low Resource Returns in a Growing Farm Economy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 51(4), pages 798-817.
    13. Lau, Lawrence J, 1972. "Profit Functions of Technologies with Multiple Inputs and Outputs," The Review of Economics and Statistics, MIT Press, vol. 54(3), pages 281-289, August.
    14. Dale W. Jorgenson & Lawrence J. Lau, 1974. "The Duality of Technology and Economic Behaviour," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(2), pages 181-200.
    15. Sato, Ryuzo, 1970. "The Estimation of Biased Technical Progress and the Production Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 11(2), pages 179-208, June.
    16. James G. Ryan & Ronald C. Duncan, 1974. "Effects On Farm Incomes And Rural Labour Of A Relative Increase In Wages," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 18(3), pages 193-207, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Buetre, Benjamin L. & Ahmadi-Esfahani, Fredoun Z., 1993. "Estimation of Factor Demand and Substitution in the Australian Pig Industry: A Dual Approach," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 61(02-1), pages 1-12, August.
    2. Vanzetti, David & Quiggin, John C., 1985. "A Comparative Analysis Of Agricultural Tractor Investment Models," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 29(2), pages 1-20, August.
    3. Tocco, Barbara & Bailey, Alastair & Davidova, Sophia, 2013. "The Theoretical Framework and Methodology to Estimate the Farm Labour and Other Factor-Derived Demand and Output Supply Systems," Working papers 155702, Factor Markets, Centre for European Policy Studies.
    4. Juliane Haensch & Sarah Ann Wheeler & Alec Zuo, 2021. "Explaining permanent and temporary water market trade patterns within local areas in the southern Murray–Darling Basin," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(2), pages 318-348, April.
    5. Lawrence, Denis, 1990. "A Generalised McFadden Cost Function for Australian Agriculture," 1990 Conference (34th), February 13-15, 1990, Brisbane, Australia 145195, Australian Agricultural and Resource Economics Society.
    6. McKay, Lloyd & Lawrence, Denis & Vlastuin, Chris, 1982. "Production Flexibility and Technical Change in Australia's Wheat-Sheep Zone," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 50(01), pages 1-18, April.
    7. Martin, John F., 1982. "Induced Innovation in the High Rainfall Zone," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 50(03), pages 1-20, December.
    8. McKay, Lloyd & Lawrence, Denis & Vlastuin, Chris, 1980. "Input Demand and Substitution in the Australian Sheep Industry," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 48(02), pages 1-14, August.
    9. Yumei Liu & Wuyang Hu & Simon Jetté-Nantel & Zhihong Tian, 2014. "The Influence of Labor Price Change on Agricultural Machinery Usage in Chinese Agriculture," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(2), pages 219-243, June.
    10. Na Du & Qianqian Shao & Ruifa Hu, 2019. "Price Elasticity of Production Factors in Beijing’s Picking Gardens," Sustainability, MDPI, vol. 11(7), pages 1-16, April.
    11. Agbola, Frank W., 1999. "The Structure of Production and Investment in Australia's Pastoral Zone," 1999 Conference (43th), January 20-22, 1999, Christchurch, New Zealand 122327, Australian Agricultural and Resource Economics Society.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. McKay, Lloyd & Lawrence, Denis & Vlastuin, Chris, 1980. "Input Demand and Substitution in the Australian Sheep Industry," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 48(02), pages 1-14, August.
    2. Wall, Charles A. & Fisher, Brian S., 1988. "Supply Response and the Theory of Production and Profit Functions," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 56(03), pages 1-22, December.
    3. Zind, R. G. & Doutriaux, J., 1978. "Estimation de l’effet de la technologie sur le rendement des facteurs de production," L'Actualité Economique, Société Canadienne de Science Economique, vol. 54(1), pages 104-110, janvier-m.
    4. Guyomard, H. & Tavéra, C., 1990. "Technical change and agricultural supply-demand analysis problems of measurement and problems of interpretation," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 26.
    5. J. W. Freebairn, 1981. "Assessing Some Effects Of Inflation On The Agricultural Sector," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 25(2), pages 107-122, August.
    6. Karanfil, Fatih & Yeddir-Tamsamani, Yasser, 2010. "Is technological change biased toward energy? A multi-sectoral analysis for the French economy," Energy Policy, Elsevier, vol. 38(4), pages 1842-1850, April.
    7. Binswanger, Hans P, 1974. "The Measurement of Technical Change Biases with Many Factors of Production," American Economic Review, American Economic Association, vol. 64(6), pages 964-976, December.
    8. Zha, Donglan & Kavuri, Anil Savio & Si, Songjian, 2017. "Energy biased technology change: Focused on Chinese energy-intensive industries," Applied Energy, Elsevier, vol. 190(C), pages 1081-1089.
    9. James Bessen, 2009. "More Machines, Better Machines...Or Better Workers?," Working Papers 0803, Research on Innovation.
    10. Freebairn, John W., 1973. "Some Estimates of Supply and Inventory Response Functions for the Cattle and Sheep Sector of New South Wales," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 41(02-3), pages 1-38, June.
    11. Buetre, Benjamin L. & Ahmadi-Esfahani, Fredoun Z., 1993. "Estimation of Factor Demand and Substitution in the Australian Pig Industry: A Dual Approach," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 61(02-1), pages 1-12, August.
    12. Bhati, U.N., 1980. "The Demand for Hired Labour on Australian Sheep Farms," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 48(02), pages 1-12, August.
    13. Martin, John F., 1982. "Induced Innovation in the High Rainfall Zone," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 50(03), pages 1-20, December.
    14. Lawrence, Denis & McKay, Lloyd, 1980. "Inputs, Outputs And Productivity Change In The Australian Sheep Industry," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(1), pages 1-14, April.
    15. Yaryna Kolomiytseva, 2018. "Revisiting Transformation and Directional Technology Distance Functions," Papers 1812.10108, arXiv.org.
    16. Frank W. Agbola & Stephen R. Harrison, 2005. "Empirical investigation of investment behaviour in Australia's pastoral region," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(1), pages 47-62, March.
    17. Kim, Tae-Kyun, 1989. "The factor bias of technical change and technology adoption under uncertainty," ISU General Staff Papers 1989010108000010138, Iowa State University, Department of Economics.
    18. Xu, Bin, 2001. "Factor bias, sector bias, and the effects of technical progress on relative factor prices," Journal of International Economics, Elsevier, vol. 54(1), pages 5-25, June.
    19. te Kloot, Jack H. & Anderson, Jock R., 1977. "Estimation Of Technological Change In The Pastoral Zone," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 45(04), pages 1-8, December.
    20. I. W. McLean, 1973. "Growth and Technological Change in Agriculture: Victoria 1870–1910," The Economic Record, The Economic Society of Australia, vol. 49(4), pages 560-574, December.

    More about this item

    Keywords

    Production Economics;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ajaeau:22482. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaresea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.