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Estimating Production Response of Broadacre Farms in Western Australia: The Nexus of Empirics and Economics Revisited

Author

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  • Vilaphonh Xayavong

    (Department of Agriculture and Food, Western Australia, 3 Baron-Hay Court, South Perth, WA 6151, Australia)

  • Nazrul Islam

    (School of Economics & Finance, Curtin Business School (CBS), P. O. Box U1987, Perth, WA, 6845, Australia and Department of Agriculture and Food, Western Australia, 3 Baron-Hay Court, South Perth, WA 6151, Western Australia)

  • Ruhul Salim

    (School of Economics & Finance, Curtin Business School (CBS), P. O. Box U1987, Perth, WA, 6845, Australia)

Abstract

Reliable estimates of elasticities are fundamental requirement to accurate economic forecasting and valid analyses of the impacts of changes in government policies or international events. The aim of this paper is thus, to estimate production response for broadacre farms in Western Australia by using a normalized quadratic profit function for the period 1977/78 to 2005/06. The result reflects the imposition of curvature restrictions for a normalized profit function, and estimated elasticities are found to be less elastic in the short run. The results from this exercise can be used in a number of ways, depending on the policy objective in mind, such as simulation for forecasting agricultural production.

Suggested Citation

  • Vilaphonh Xayavong & Nazrul Islam & Ruhul Salim, 2011. "Estimating Production Response of Broadacre Farms in Western Australia: The Nexus of Empirics and Economics Revisited," Economic Analysis and Policy, Elsevier, vol. 41(3), pages 217-232, December.
    • Handle: RePEc:eee:ecanpo:v:41:y:2011:i:3:p:217-232
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    Cited by:

    1. Oczkowski, Eddie & Bandara, Yapa, 2013. "CGE modelling, regional economies, water buybacks," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(3).
    2. Culas, Richard J., 2014. "Determinants of land use in wheat production: The Australian wheat-sheep zone," 2014 Conference (58th), February 4-7, 2014, Port Macquarie, Australia 165826, Australian Agricultural and Resource Economics Society.
    3. Hughes, Neal & Soh, Wei Ying & Lawson, Kenton & Lu, Michael, 2022. "Improving the performance of micro-simulation models with machine learning: The case of Australian farms," Economic Modelling, Elsevier, vol. 115(C).

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