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Price-induced technical progress in Italian agriculture

  • Roberto Esposti

    ()

    (Department of Economics, Università Politecnica delle Marche, Piazza Martelli, 8, 60121 Ancona, Italy)

  • Pierpaolo Pierani

    (Department of Economic Policy, Finance and Development, University of Siena Italy)

In this paper we aim at investigating the price-induced innovation hypothesis in Italian agriculture. We generalize the framework of analysis proposed by Peeters and Surry (2000). This generalization includes a short-run specification of the dual technology as well as a quadratic spline in a time variable. We argue that the temporary equilibrium setting gives a more realistic representation of how relative prices may steer innovation and variable input bias over time. The quadratic function has desirable properties with respect to the splined variable, i.e., a more flexible treatment of exogenous technical change. Results provide evidence in favour of the price-induced innovation in Italian agriculture from 1951 to 1991.

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Article provided by INRA Department of Economics in its journal Review of Agricultural and Environmental Studies.

Volume (Year): 89 (2008)
Issue (Month): 4 ()
Pages: 5-28

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Handle: RePEc:rae:jourae:v:89:y:2008:i:4:p:5-28
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