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Dynamic Corn Supply Functions: A Model with Explicit Optimization

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  • Miranowski, John
  • Tegene, Abebayehu
  • Huffman, Wallace

Abstract

A model of optimal dynamic agricultural supply is derived and hired assuming farmers have two annual stochastic crop production activities, a joint limitation on production capacity, interdependencies between past acreage utilization and current productivity, and rational expectations. A five-equation specification is fitted to annual data, 1948-80 Estimated parameters are consistent with the theory, and the model simulates well The long-run price elasticity of corn acreage is 0.2, which is similar to those obtained from ad hoc dynamic models, but our short-run elasticities are different.

Suggested Citation

  • Miranowski, John & Tegene, Abebayehu & Huffman, Wallace, 1988. "Dynamic Corn Supply Functions: A Model with Explicit Optimization," Staff General Research Papers Archive 10699, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:10699
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    Cited by:

    1. Drafor, Ivy & Kunze, Dagmar & Sarpong, Daniel Bruce, 2013. "Food Security: How Rural Ghanaian Households Respond to Food Shortages in Lean Season," International Journal of Agricultural Management, Institute of Agricultural Management;International Farm Management Association, vol. 2(4), July.
    2. Skold, Karl Durwood, 1989. "The integration of alternative information systems: an application to the Hogs and Pigs report," ISU General Staff Papers 1989010108000010239, Iowa State University, Department of Economics.
    3. Peterson, Jeffrey M. & Boisvert, Richard N., 2001. "Control of Nonpoint Source Pollution Through Voluntary Incentive-Based Policies: An Application to Nitrate Contamination in New York," Agricultural and Resource Economics Review, Cambridge University Press, pages 127-138.
    4. Hikaru Hanawa Peterson & William G. Tomek, 2005. "How much of commodity price behavior can a rational expectations storage model explain?," Agricultural Economics, International Association of Agricultural Economists, pages 289-303.
    5. Taffesse, Alemayehu Seyoum, 1997. "Government policy and dynamic supply response: a study of the compulsory grain delivery system," MPRA Paper 18674, University Library of Munich, Germany.
    6. Burton, Diana M. & Love, H. Alan, 1996. "A Review Of Alternative Expectations Regimes In Commodity Markets: Specification, Estimation, And Hypothesis Testing Using Structural Models," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 25(2), October.
    7. Peterson, Jeffrey M. & Boisvert, Richard N., 2001. "Control of Nonpoint Source Pollution Through Voluntary Incentive-Based Policies: An Application to Nitrate Contamination in New York," Agricultural and Resource Economics Review, Cambridge University Press, pages 127-138.
    8. Foster, William E. & Babcock, Bruce A., 1993. "Commodity Policy, Price Incentives, and the Growth in Per-Acre Yields," Journal of Agricultural and Applied Economics, Cambridge University Press, pages 253-265.
    9. Horan, Richard D. & Claassen, Roger & Cooper, Joseph C., 2000. "Environmental Risk And Agri-Environmental Policy Design," 2000 Annual meeting, July 30-August 2, Tampa, FL 21827, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Foster, William E. & Babcock, Bruce, 1993. "Commodity Policy, Price Incentives, and the Growth in Per-Acre Yields," ISU General Staff Papers 199307010700001538, Iowa State University, Department of Economics.
    11. Foster, William E. & Babcock, Bruce A., 1993. "Commodity Policy, Price Incentives, and the Growth in Per-Acre Yields," Journal of Agricultural and Applied Economics, Cambridge University Press, pages 253-265.
    12. Roger Claassen & Richard Horan, 2001. "Uniform and Non-Uniform Second-Best Input Taxes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 1-22.
    13. Lin, Chien-Pang & Barkley, Andrew P., 1997. "Declining Commodity Program Payments and Enhanced Environmental Regulations: Impacts on Acreage Allocation in the Great Plains," 1997 Annual Meeting, July 13-16, 1997, Reno\Sparks, Nevada 35932, Western Agricultural Economics Association.
    14. Nyairo, Newton Morara & Kola, Jukka & Sumelius, John, 2010. "Impacts of agricultural trade and market liberalization of food security in developing countries: comparative study of Kenya and Zambia," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96172, African Association of Agricultural Economists (AAAE);Agricultural Economics Association of South Africa (AEASA).
    15. Alain Carpentier & Alexandre Gohin, 2015. "On the economic theory of crop rotations: value of the crop rotation effects and implications on acreage choice modeling," Working Papers SMART - LERECO 15-04, INRA UMR SMART-LERECO.
    16. Cho, Gyu D., 1992. "Estimation of a Wheat Acreage Response Function for Kansas," Staff Papers 118174, Kansas State University, Department of Agricultural Economics.
    17. Baker, Mindy L. & Hayes, Dermot J. & Babcock, Bruce A., 2008. "Crop-Based Biofuel Production under Acreage Constraints and Uncertainty," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6352, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Mindy L. Mallory & Dermot J. Hayes & Bruce A. Babcock, 2011. "Crop-Based Biofuel Production with Acreage Competition and Uncertainty," Land Economics, University of Wisconsin Press, vol. 87(4), pages 610-627.

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