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Supply And Demand Functions For Uk Agriculture: Biases Of Technical Change And The Returns To Public R&D

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  • Yougesh Khatri
  • Colin Thirtle

Abstract

This study is the first UK application of the integrated, single‐stage approach to estimating the returns to R&D. Fitting a residual profit function, which incorporates the technology variables, to new data for UK agriculture for 1954–1990 produces short‐ and long‐run estimates of the output supply and input‐demand price elasticities, elasticities of the effects of relaxing the non‐variable input constraints and shadow prices for these non‐variable factors. All of the supply and demand relationships are found to be inelastic, but the price‐responsiveness of the system has increased over time. The long‐run model, in which all of the inputs except land are treated as variable and private‐sector research is included, gives a marginal rate of return to public agricultural R&D of only 18 per cent. Estimates of the factor‐saving biases of the technology variables suggest that public R&D has had its greatest effect in the animal sector.

Suggested Citation

  • Yougesh Khatri & Colin Thirtle, 1996. "Supply And Demand Functions For Uk Agriculture: Biases Of Technical Change And The Returns To Public R&D," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1‐4), pages 338-354, January.
  • Handle: RePEc:bla:jageco:v:47:y:1996:i:1-4:p:338-354
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    File URL: https://doi.org/10.1111/j.1477-9552.1996.tb00697.x
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    References listed on IDEAS

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    1. J. Stephen Clark & Curtis E. Youngblood, 1992. "Estimating Duality Models with Biased Technical Change: A Time Series Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(2), pages 353-360.
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    3. C. Thirtle & P. Bottomley, 1992. "Total Factor Productivity In Uk Agriculture, 1967‐90," Journal of Agricultural Economics, Wiley Blackwell, vol. 43(3), pages 381-400, September.
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    Cited by:

    1. Barnes, Andrew P., 2002. "Publicly-funded UK agricultural R&D and 'social' total factor productivity," Agricultural Economics, Blackwell, vol. 27(1), pages 65-74, May.
    2. Colin Thirtle, 1999. "Productivity and the Returns to Levy‐Funded R&D for Sugar Production in the Eastern Counties of England," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(3), pages 450-467, September.
    3. Bailey, Alastair & Irz, Xavier T. & Balcombe, Kelvin George, 2003. "An Appliation Of The Stochastic Latent Variable Approach To The Correction Of Sector Level Tfp Calculations In The Face Of Biased Technological Change," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25842, International Association of Agricultural Economists.
    4. Farrington, John & Thirtle, Colin & Henderson, Simon, 1997. "Methodologies for monitoring and evaluating agricultural and natural resources research," Agricultural Systems, Elsevier, vol. 55(2), pages 273-300, October.
    5. Barnes, Andrew P., 2001. "Towards a framework for justifying public agricultural R&D: the example of UK agricultural research policy," Research Policy, Elsevier, vol. 30(4), pages 663-672, April.
    6. Unterschultz, James R. & Jeffrey, Scott R. & Quagrainie, Kwamena K., 2000. "Value-Adding 20 Billion By 2005: Impact At The Alberta Farm Gate," Project Report Series 24049, University of Alberta, Department of Resource Economics and Environmental Sociology.
    7. Thirtle, C. & Bottomley, P. & Palladino, P. & Schimmelpfennig, D. & Townsend, R., 1998. "The rise and fall of public sector plant breeding in the United Kingdom: a causal chain model of basic and applied research and diffusion," Agricultural Economics, Blackwell, vol. 19(1-2), pages 127-143, September.
    8. Alston, Julian M., 2002. "Spillovers," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(3), pages 1-32.
    9. David Schimmelpfennig & Colin Thirtle, 1999. "The Internationalization Of Agricultural Technology: Patents, R&D Spillovers, And Their Effects On Productivity In The European Union And United States," Contemporary Economic Policy, Western Economic Association International, vol. 17(4), pages 457-468, October.

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