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The Effect of Increased Energy Prices on Agriculture: A Differential Supply Approach

Author

Listed:
  • Moss, Charles B.
  • Livanis, Grigorios T.
  • Schmitz, Andrew

Abstract

The increase in energy prices between 2004 and 2007 has several potential consequences for aggregate agriculture in the U.S. We estimate the derived input demand elasticities for energy as well as capital, labor, and materials using the differential supply formulation. Given that the derived input demand for energy is inelastic, it is more price-responsive than the other inputs. The results also indicate that the U.S. aggregate agricultural supply function is responsive to energy prices.

Suggested Citation

  • Moss, Charles B. & Livanis, Grigorios T. & Schmitz, Andrew, 2010. "The Effect of Increased Energy Prices on Agriculture: A Differential Supply Approach," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 42(4), pages 1-8, November.
    • Handle: RePEc:ags:joaaec:100514
    DOI: 10.22004/ag.econ.100514
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    Cited by:

    1. Dong Hee Suh & Charles B. Moss, 2021. "Examining the Input and Output Linkages in Agricultural Production Systems," Agriculture, MDPI, vol. 11(1), pages 1-13, January.
    2. John Baffes & Tassos Haniotis, 2016. "What Explains Agricultural Price Movements?," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(3), pages 706-721, September.
    3. John Baffes & M. Ayhan Kose & Franziska Ohnsorge & Marc Stocker, 2015. "The Great Plunge in Oil Prices: Causes, Consequences, and Policy Responses," Koç University-TUSIAD Economic Research Forum Working Papers 1504, Koc University-TUSIAD Economic Research Forum.
    4. Karel Janda & Ladislav Krištoufek, 2019. "The Relationship Between Fuel and Food Prices: Methods and Outcomes," Annual Review of Resource Economics, Annual Reviews, vol. 11(1), pages 195-216, October.
    5. Aye, Goodness C. & Odhiambo, Nicholas M., 2021. "Oil prices and agricultural growth in South Africa: A threshold analysis," Resources Policy, Elsevier, vol. 73(C).
    6. Charles B. Moss & Dong Hee Suh, 2020. "Effect of Compliance Cost on the Supply of Bank Credit to Agriculture: A Differential Approach," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(2), pages 713-726, March.
    7. Karel Janda & Ladislav Kristoufek, 2019. "The relationship between fuel and food prices: Methods, outcomes, and lessons for commodity price risk management," CAMA Working Papers 2019-20, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    8. World Bank Group, 2016. "Commodity Markets Outlook, July 2016," World Bank Publications, The World Bank, number 24735.
    9. Gülcan ÖNEL, 2018. "An implicit model of adjustment costs in differential input demand systems," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(615), S), pages 119-132, Summer.

    More about this item

    Keywords

    Agribusiness; Agricultural Finance; Demand and Price Analysis; Financial Economics; Industrial Organization; Labor and Human Capital; Land Economics/Use; Marketing; Production Economics; Productivity Analysis; Research Methods/ Statistical Methods;
    All these keywords.

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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