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Production Flexibility and Technical Change in Australia's Wheat-Sheep Zone

Author

Listed:
  • McKay, Lloyd
  • Lawrence, Denis
  • Vlastuin, Chris

Abstract

The flexibility of production and the bias of technical change in the Wheat- Sheep Zone has been examined by estimating the system of derived output and input share equations from a translog variable profit function. This analysis was undertaken for three outputs (sheep and wool, crops, and beef cattle and other farm output) and five inputs (labour, materials and services, livestock, capital, and land). The supply of each of these three major groups of farm outputs has been inelastic. Sheep enterprise production has been complementary with cropping while crop and beef cattle outputs have not been complementary. The demand for materials and services inputs has been elastic while the elasticity of demand for labour has been approximately unity. Wool and other sheep output has been relatively labour intensive while crops have been relatively capital intensive. Livestock activities (sheep and cattle) have been relatively land intensive. Hence, policies that have caused the price of labour to be greater (less) than it would have been otherwise have discouraged (encouraged) the production of sheep enterprise output relatively more than other farm outputs.

Suggested Citation

  • 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), April.
  • Handle: RePEc:ags:remaae:12290
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    File URL: http://purl.umn.edu/12290
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    References listed on IDEAS

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    1. Wicks, John A. & Dillon, John L., 1978. "APMAA Estimates of Supply Elasticities for Australian Wool, Beef and Wheat," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 46(01), April.
    2. Powell, Alan A. & Gruen, Fred H.G., 1967. "The Estimation Of Production Frontiers: The Australian Livestock/Cereals Complex," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 11(01), June.
    3. Vincent, David P., 1977. "Factor Substitution In Australian Agriculture," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(02), August.
    4. Duloy, J.H., 1964. "Simultaneous-Equations Bias And Agricultural Production Function Estimation," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 8(02), December.
    5. 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(01), April.
    6. Vincent, David P & Dixon, Peter B & Powell, Alan A, 1980. "The Estimation of Supply Response in Australian Agrucilture: The CRESH/CRETH Production System," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 221-242, February.
    7. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
    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), August.
    9. Diewert, W. E., 1973. "Functional forms for profit and transformation functions," Journal of Economic Theory, Elsevier, vol. 6(3), pages 284-316, June.
    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, September.
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    Citations

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    Cited by:

    1. Agbola, Frank W., 2005. "Optimal intertemporal investment in Australian agriculture: An empirical investigation," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 6(2), August.
    2. Vere, D.T., 1998. "Investigating improved pasture productivity change on the New South Wales tablelands," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 18(1), January.
    3. Vere, D. T., 1998. "Investigating improved pasture productivity change on the New South Wales tablelands," Agricultural Economics, Blackwell, vol. 18(1), pages 63-74, January.
    4. Fisher, Brian S. & Wall, Charles A., 1990. "Supply Response In The Australian Sheep Industry: A Profit Function Approach," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 34(02), August.
    5. Chisholm, Anthony H., 1992. "Australian Agriculture: A Sustainability Story," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 36(01), April.
    6. Nguyen, Duong T.M. & McLaren, Keith Robert & Zhao, Xueyan, 2008. "Multi-Output Broadacre Agricultural Production: Estimating A Cost Function Using Quasi-Micro Farm Level Data From Australia," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6009, Australian Agricultural and Resource Economics Society.
    7. N. Islam, 2000. "An Analysis of Productivity Growth in Western Australian Agriculture," Economics Discussion / Working Papers 00-15, The University of Western Australia, Department of Economics.
    8. H. Ahammad & N. Islam, 1999. "Estimating the WA Agricultural Production System: A profit function approach," Economics Discussion / Working Papers 99-11, The University of Western Australia, Department of Economics.
    9. Mullen, John D. & Cox, Thomas L., 1996. "Measuring Productivity Growth In Australian Broadacre Agriculture," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 40(03), December.
    10. 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), December.

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