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Estimates of Farm Output Supply and Input Demand Elasticities: The Translog Profit Function Approach

Author

Listed:
  • Muhammad Ali Chaudhary

    (Quaid-i-Azam University, Islamabad.)

  • Mushtaq Ahmad Khan

    (Quaid-i-Azam University, Islamabad.)

  • Kaukab Hassan Naqvi

    (Planning Division, Government of Pakistan, Islamabad.)

Abstract

The importance of estimating valid elasticities of farm output supply and input demand can hardly be overemphasised. Reliable estimates of these elasticities are sine qua non for predicting accurately the farmer responsiveness to changes in inputoutput prices and government taxes and thereby for formulating successful agricultural incentive programmes consistent with national requirements of food, development and exports. In fact, robust estimates of the coefficients of such elasticities can serve as a solid basis in determining effective policy relevant interventions for promoting production, equity, efficiency, and finally egalitarian income distribution in the farm sector of the economy. Farmer input factor demand and output supply elasticities have earlier been derived with direct or indirect application of the Cobb-Douglas production function to farm survey data [Lau and Yotopoulos (1971); Yotopoulos (1972); Yotopoulos, Lau and Lin (1976); Junankar (1980) and Sindhu and Baanannte (1981)]. The Cobb- Douglas production function is based on highly restricted assumptions such as the unitary elasticity of substitution, constant returns to scale and "a priori" imposition of separability restrictions.

Suggested Citation

  • Muhammad Ali Chaudhary & Mushtaq Ahmad Khan & Kaukab Hassan Naqvi, 1998. "Estimates of Farm Output Supply and Input Demand Elasticities: The Translog Profit Function Approach," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 37(4), pages 1031-1050.
    • Handle: RePEc:pid:journl:v:37:y:1998:i:4:p:1031-1050
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    References listed on IDEAS

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    2. Barten, A. P., 1969. "Maximum likelihood estimation of a complete system of demand equations," European Economic Review, Elsevier, vol. 1(1), pages 7-73.
    3. Trosper, Ronald L, 1978. "American Indian Relative Ranching Efficiency," American Economic Review, American Economic Association, vol. 68(4), pages 503-516, September.
    4. BARTEN, Anton P., 1969. "Maximum likelihood estimation of a complete system of demand equations," LIDAM Reprints CORE 34, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Lau, Lawrence J & Yotopoulos, Pan A, 1971. "A Test for Relative Efficiency and Application to Indian Agriculture," American Economic Review, American Economic Association, vol. 61(1), pages 94-109, March.
    6. McKay, Lloyd & Lawrence, Denis & Vlastuin, Chris, 1983. "Profit, Output Supply, and Input Demand Functions for Multiproduct Firms: The Case of Australian Agriculture," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(2), pages 323-339, June.
    7. Diewert, W E, 1971. "An Application of the Shephard Duality Theorem: A Generalized Leontief Production Function," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 481-507, May-June.
    8. Lau, Lawrence J., 1969. "Duality and the structure of utility functions," Journal of Economic Theory, Elsevier, vol. 1(4), pages 374-396, December.
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    Cited by:

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    2. Kaimba, George K. & Mithöfer, Dagmar & Muendo, Kavoi M., 2021. "Commercialization of underutilized fruits: Baobab pulp supply response to price and non-price incentives in Kenya," Food Policy, Elsevier, vol. 99(C).
    3. John Njenga Macharia & Gracious Malton Diiro & John Rono Busienei & Kimpei Munei & Hippolyte D. Affognon & Sunday Ekesi & Beatrice Muriithi & Dorothy Nakimbugwe & Chrysantus Mbi Tanga & Komi K. M. Fia, 2020. "Gendered analysis of the demand for poultry feed in Kenya," Agrekon, Taylor & Francis Journals, vol. 59(4), pages 426-439, October.
    4. Luca Tiberti & Marco Tiberti, 2015. "Rural Policies, Price Change and Poverty in Tanzania: An Agricultural Household Model-Based Assessment," Journal of African Economies, Centre for the Study of African Economies, vol. 24(2), pages 193-229.
    5. Wijetunga, Chatura Sewwandi, 2023. "Rice Production Structures in Sri Lanka: The Normalized Translog Profit Function Approach," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 6(02), January.
    6. Mbugua, Mercy Wanjiru & Irungu, Patrick & Nzuma, Jonathan, 2014. "Analysis Of Demand For Antibiotics In Poultry Production In Kiambu County, Kenya," Dissertations and Theses 269532, University of Nairobi, Department of Agricultural Economics.

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