IDEAS home Printed from https://ideas.repec.org/a/kap/jproda/v14y2000i1p53-70.html
   My bibliography  Save this article

Incorporating Price-Induced Innovation in a Symmetric Generalised McFadden Cost Function with Several Outputs

Author

Listed:
  • Ludo Peeters
  • Yves Surry

Abstract

This paper proposes a multiple-output Symmetric Generalised McFadden (SGM) cost function, incorporating both exogenous and endogenous technological change. Whilst exogenous technological change is captured by the usual time trend, endogenous or price-induced technological change is cast within a partial-adjustment framework involving lagged input prices. The study points to various dimensions or components of technological change, and allows to disentangle “pure” factor substitution, given the state of the technology, from factor substitution due to price-induced changes in technology. Under the conditions of non-jointness in input quantities, the model further allows to identify technological change biases for each output separately. An empirical application is presented in which the proposed model is applied to time-series data on the feed manufacturing industry in Belgium. To improve on the econometrics, the SGM cost function also incorporates linear splines. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • Ludo Peeters & Yves Surry, 2000. "Incorporating Price-Induced Innovation in a Symmetric Generalised McFadden Cost Function with Several Outputs," Journal of Productivity Analysis, Springer, vol. 14(1), pages 53-70, July.
  • Handle: RePEc:kap:jproda:v:14:y:2000:i:1:p:53-70 DOI: 10.1023/A:1007843928635
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1023/A:1007843928635
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rask, Kevin, 1995. "The Structure of Technology in Brazilian Sugarcane Production, 1975-87: An Application of a Modified Symmetric Generalized McFadden Cost Function," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(3), pages 221-232, July-Sept.
    2. Fulginiti, Lilyan E., 1994. "Price-Conditional Technology," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(01), July.
    3. Livernois, John R & Ryan, David L, 1989. "Testing for Non-jointness in Oil and Gas Exploration: A Variable Profit Function Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(2), pages 479-504, May.
    4. Diewert, W E & Wales, T J, 1992. "Quadratic Spline Models for Producer's Supply and Demand Functions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(3), pages 705-722, August.
    5. Diewert, Walter E & Wales, Terence J, 1987. "Flexible Functional Forms and Global Curvature Conditions," Econometrica, Econometric Society, vol. 55(1), pages 43-68, January.
    6. Peeters, Ludo & Surry, Yves, 1993. "Estimating feed utilisation matrices using a cost function approach," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 9(2), August.
    7. Pinar Celikkol & Spiro Stefanou, 1999. "Measuring the Impact of Price-Induced Innovation on Technological Progress: Application to the U.S. Food Processing and Distribution Sector," Journal of Productivity Analysis, Springer, pages 135-151.
    8. Fernando S. Machado, 1995. "Testing The Induced Innovation Hypothesis Using Cointegration Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(3), pages 349-360.
    9. Shumway, C. Richard, 1993. "Production economics: Worthwhile investment?," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 9(2), August.
    10. Peeters, Ludo, 1995. "Measuring Biases of Technical Change: The Case of Cereals Displacement in Livestock Ration Formulation in Belgium," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 22(2), pages 137-156.
    11. Ulrich Kohli, 1994. "Canadian Imports and Exports by Origin and Destination: A Semi-flexible Approach," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 580-603, August.
    12. Lasserre, Pierre & Ouellette, Pierre, 1991. "The measurement of productivity and scarcity rents : The case of asbestos in Canada," Journal of Econometrics, Elsevier, pages 287-312.
    13. Diewert, W. E. & Wales, T. J., 1988. "A normalized quadratic semiflexible functional form," Journal of Econometrics, Elsevier, vol. 37(3), pages 327-342, March.
    14. Krinsky, Itzhak & Robb, A Leslie, 1986. "On Approximating the Statistical Properties of Elasticities," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 715-719, November.
    15. Kohli, Ulrich R, 1981. "Nonjointness and Factor Intensity in U.S. Production," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(1), pages 3-18, February.
    16. Stevenson, Rodney, 1980. "Measuring Technological Bias," American Economic Review, American Economic Association, pages 162-173.
    17. Hayami, Yujiro & Ruttan, V W, 1970. "Factor Prices and Technical Change in Agricultural Development: The United States and Japan, 1880-1960," Journal of Political Economy, University of Chicago Press, pages 1115-1141.
    18. Kohli, Ulrich, 1993. "A Symmetric Normalized Quadratic GNP Function and the U.S. Demand for Imports and Supply of Exports," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(1), pages 243-255, February.
    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. Kenneth Stewart, 2009. "Non-jointness and scope economies in the multiproduct symmetric generalized McFadden cost function," Journal of Productivity Analysis, Springer, pages 161-171.
    2. Pierani, Pierpaolo & Rizzi, Pier Luigi, 2003. "Technology and efficiency in a panel of Italian dairy farms: an SGM restricted cost function approach," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 29(2), October.
    3. Roberto Esposti & Pierpaolo Pierani, 2008. "Price-induced technical progress in Italian agriculture," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 89(4), pages 5-28.
    4. Louhichi, Kamel & Jacquet, Florence & Butault, Jean Pierre, 2012. "Estimating input allocation from heterogeneous data sources: A comparison of alternative estimation approaches," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 13(2), June.
    5. Esposti, Roberto & Pierani, Pierpaolo, 2005. "Price-Induced Technological Change in Italian Agriculture: An SGM Restricted Cost Function Approach (1951-91)," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24662, European Association of Agricultural Economists.
    6. Wieck, Christine & Heckelei, Thomas, 2004. "Development Of Marginal Cost Distributions In Dairy Production Regions Of The Eu," 2004 Annual meeting, August 1-4, Denver, CO 19943, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Shankar, Bhavani & Piesse, Jenifer & Thirtle, Colin, 2003. "Energy substitutability in transition agriculture: estimates and implications for Hungary," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 29(2), October.
    8. Casasnovas, Valero L. & Aldanondo, Ana Maria, 2011. "Influence of Animal Feeding on Milk Supply in Navarre," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114316, European Association of Agricultural Economists.

    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:kap:jproda:v:14:y:2000:i:1:p:53-70. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.