A comparison of proxy variable and stochastic latent variable approaches to the measurement of bias in technological change in south african agriculture
Technical change is inherently unobservable and has conventionally been represented by proxy variables, from simple time trends to more sophisticated knowledge stock variables. This paper follows Lambert and Shonkwiler (1995) in modelling technical change as a stochastic unobservable variable and tests this formulation against the alternative of using R&D and patent indices. This is done by fitting a system of share equations, derived from the dual profit function, to production data for South African agriculture. Each equation includes both unobserved technical change components and technical proxy variables. Variable deletion tests show that conventional proxy variables fail to explain the biases of technological change, while cointegration tests show that technical change is both stochastic and biased. The latent variables provide estimates of biases that are consistent with past studies and the historical record and can be explained by policy change in South Africa following WWII. The demonstration of high rates of return to R&D is not sufficient to justify R&D activity when biased technological change exacerbates input use and welfare distortions within and without the sector. * We thank the University of Pretoria for funding the study and the referees and delegates for many useful comments.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 12 (2003)
Issue (Month): 4 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/GEIN20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/GEIN20|
When requesting a correction, please mention this item's handle: RePEc:taf:ecinnt:v:12:y:2003:i:4:p:315-324. 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: (Michael McNulty)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.