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Supply Responses In The South Australian Potato Industry

Author

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  • Mules, T.J.
  • Jarrett, Frank G.

Abstract

The potato industry in South Australia is characterised by very unstable prices. One hypothesis for this instability is that potato growers' acreage responses follow a cobweb pattern, that is, a one year lag of acreage to price. This hypothesis is tested, together with a two year lag and a distributed lag. The distributed lag model seems the most satisfactory and gives a short-run elasticity of acreage to price of 0.36 and a long-run elasticity of 1.09. An alternative to the lagged price hypothesis is the "constant cash return" hypothesis which postulates that potatoes are grown to provide a certain cash income to permit farm development. This explanation of acreage response only seems relevant in the dairying and fat lamb areas of the State.

Suggested Citation

  • Mules, T.J. & Jarrett, Frank G., 1966. "Supply Responses In The South Australian Potato Industry," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 10(1), pages 1-8, June.
    • Handle: RePEc:ags:ajaeau:22670
    DOI: 10.22004/ag.econ.22670
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    Cited by:

    1. Bradley Franklin & Keith C. Knapp & Kurt A. Schwabe, 2017. "A Dynamic Regional Model of Irrigated Perennial Crop Production," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 1-30, January.
    2. J. W. Freebairn, 1976. "The Value and Distribution of the Benefits of Commodity Price Outlook Information," The Economic Record, The Economic Society of Australia, vol. 52(2), pages 199-212, June.

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    Keywords

    Crop Production/Industries;

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