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

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Listed author(s):
  • 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 Californias 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.

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File URL: http://purl.umn.edu/11992
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Paper provided by University of California, Davis, Department of Agricultural and Resource Economics in its series Working Papers with number 11992.

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Date of creation: 2004
Handle: RePEc:ags:ucdavw:11992
Contact details of provider: Phone: 530-752-1517
Fax: 530-752-5614
Web page: http://www.agecon.ucdavis.edu/

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Keywords: Research and Development/Tech Change/Emerging Technologies;

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Find related papers by 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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  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), July.
  3. Fulginiti, Lilyan E & Perrin, Richard K, 1993. "Prices and Productivity in Agriculture," The Review of Economics and Statistics, MIT Press, vol. 75(3), pages 471-482, August.
  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.
  5. Geweke, John, 1986. "Exact Inference in the Inequality Constrained Normal Linear Regression Model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(2), pages 127-141, April.
  6. Paris, Quirino & Caputo, Michael R., 1995. "The Rhetoric Of Duality," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(01), July.
  7. Pinar Celikkol & Spiro Stefanou, 1999. "Measuring the Impact of Price-Induced Innovation on Technological Progress: Application to the U.S. Food Processing and Distribution Sector," Journal of Productivity Analysis, Springer, vol. 12(2), pages 135-151, September.
  8. Samuelson, Paul A & Sato, Ryuzo, 1984. "Unattainability of Integrability and Definiteness Conditions in the General Case of Demand for Money and Goods," American Economic Review, American Economic Association, vol. 74(4), pages 588-604, September.
  9. Adam Jaffe & Richard Newell & Robert Stavins, 2002. "Environmental Policy and Technological Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(1), pages 41-70, June.
  10. Silberberg, Eugene, 1974. "A revision of comparative statics methodology in economics, or, how to do comparative statics on the back of an envelope," Journal of Economic Theory, Elsevier, vol. 7(2), pages 159-172, February.
  11. Quirino Paris & Michael R. Caputo, 2001. "Price-induced technical progress and comparative statics," Economics Bulletin, AccessEcon, vol. 15(8), pages 1-8.
  12. A Oude Lansink & E Silva & S Stefanou, 2000. "Decomposing productivity growth allowing efficiency gains and price-induced technical progress," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 27(4), pages 497-518, December.
  13. Hirsch, Werner Z, 1969. "Technological Progress and Microeconomic Theory," American Economic Review, American Economic Association, vol. 59(2), pages 36-43, May.
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Cited by:

  1. 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.
  2. Roberto Esposti & Pierpaolo Pierani, 2008. "Price-induced technical progress in Italian agriculture," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 89(4), pages 5-28.
  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. 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.
  5. Meszaros, Sandor, 2008. "Theory testing (hypothesis testing) in agricultural economics," Studies in Agricultural Economics, Research Institute for Agricultural Economics, issue 107, March.
  6. 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.

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