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Biases of Technical Change in South African Agriculture: A Cost Function Approach

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  • R F Townsend
  • Y Khatri
  • C Thirtle

Abstract

This paper exploits the properties of the third order approximation of the translog cost function which allows nested tests regarding the nature of technical change and specifically a direct test for price-induced technical change. Using data from 1949 to 1990 the input demand elasticities and factor saving biases were estimated for South African agriculture. Large machinery-using biases of technical change were evident with no labour-using biases. This, together with substitutability between machinery and labour, has-not contributed to alleviating the unemployment problem currently faced in South Africa. The hypothesis of no price induced bias was rejected suggesting that changing pricing policies may be a consideration for alleviating the current technology biases in South African agriculture.

Suggested Citation

  • R F Townsend & Y Khatri & C Thirtle, 1998. "Biases of Technical Change in South African Agriculture: A Cost Function Approach," Studies in Economics and Econometrics, Taylor & Francis Journals, vol. 22(2), pages 15-27, July.
    • Handle: RePEc:taf:rseexx:v:22:y:1998:i:2:p:15-27
    DOI: 10.1080/03796205.1998.12129122
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