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An Atemporal Microeconomic Theory And An Empirical Test Of Price-Induced Technical Progress

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  • Caputo, Michael R.
  • Paris, Quirino

Abstract

An exhaustive comparative statics analysis of a general price taking cost-minimizing model of the firm operating under the influence of price-induced technical progress is carried out from a dual vista. The resulting refutable implications are observable and thus amenable to empirical verification, and take on the form of a symmetric and negative semidefinite matrix. Using data from individual cotton gins in California's San Joaquin Valley, we empirically test the complete set of implications of the price-induced technical progress theory using both classical and Bayesian statistical procedures. We find that the data are fully consistent with the atemporal, costminimizing, price-induced microeconomic theory of technical progress.

Suggested Citation

  • Caputo, Michael R. & Paris, Quirino, 2004. "An Atemporal Microeconomic Theory And An Empirical Test Of Price-Induced Technical Progress," Working Papers 11992, University of California, Davis, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:ucdavw:11992
    DOI: 10.22004/ag.econ.11992
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    1. Paris, Quirino & Caputo, Michael R., 2001. "Comparative Statics Of Money-Goods Specifications Of The Utility Function," Working Papers 11953, University of California, Davis, Department of Agricultural and Resource Economics.
    2. Sexton, Richard J. & Wilson, Brooks M. & Wann, Joyce J., 1989. "Some Tests Of The Economic Theory Of Cooperatives: Methodology And Application To Cotton Ginning," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(01), pages 1-11, July.
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    4. McFadden, Daniel, 1978. "Cost, Revenue, and Profit Functions," Histoy of Economic Thought Chapters, in: Fuss, Melvyn & McFadden, Daniel (ed.),Production Economics: A Dual Approach to Theory and Applications, volume 1, chapter 1, McMaster University Archive for the History of Economic Thought.
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    7. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (II): Applications of the Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 2, number fuss1978a.
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    Cited by:

    1. Belton M. Fleisher & William H. McGuire & Xiaojun Wang & Min Qiang Zhao, 2021. "Induced innovation: evidence from China’s secondary industry," Applied Economics, Taylor & Francis Journals, vol. 53(52), pages 6075-6093, November.
    2. Esposti, Roberto & Pierani, Pierpaolo, 2008. "Price-induced technical progress in Italian agriculture," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 89(4).
    3. Caputo, Michael R. & Paris, Quirino, 2013. "An intertemporal microeconomic theory of disembodied and price-induced technical progress," Economic Modelling, Elsevier, vol. 33(C), pages 631-640.
    4. Meszaros, Sandor, 2008. "Theory testing (hypothesis testing) in agricultural economics," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 107, pages 1-13, March.
    5. Quirino Paris, 2009. "Certainties and Novelties in Production Economics," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 3, August.
    6. 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.
    7. Kumar, Surender & Managi, Shunsuke, 2009. "Energy price-induced and exogenous technological change: Assessing the economic and environmental outcomes," Resource and Energy Economics, Elsevier, vol. 31(4), pages 334-353, November.
    8. Quirino Paris, 2008. "Price-induced technical progress in 80 years of US agriculture," Journal of Productivity Analysis, Springer, vol. 30(1), pages 29-51, August.
    9. Pinedo, Wilman Iglesias; Fulginiti, Lilyan E.; Perrin, Richard K., 2024. "The Cost of Armed Conflict to Agriculture in Colombia," Research on World Agricultural Economy, Nan Yang Academy of Sciences Pte Ltd (NASS), vol. 5(3), September.

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    Keywords

    Research and Development/Tech Change/Emerging Technologies;

    JEL classification:

    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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