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Allocable Fixed Inputs as a Cause of Joint Production: A Cost Function Approach

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  • Howard D. Leathers

Abstract

The multiproduct cost concepts of Baumol, Panzar, and Willig are used to explore the contention of Shumway, Pope, and Nash that allocable fixed inputs cause joint production. Allocable fixed inputs may create an interdependence in the short-run cost function when none exists in the long run; however, this will not necessarily lead to joint production. For joint production to occur in the short run, either the short-run cost function must exhibit economies of scope, or stand-alone production of one of the commodities must exhibit diseconomies of size. The issue of whether allocable fixed inputs cause joint production is an empirical question.

Suggested Citation

  • Howard D. Leathers, 1991. "Allocable Fixed Inputs as a Cause of Joint Production: A Cost Function Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(4), pages 1083-1090.
    • Handle: RePEc:oup:ajagec:v:73:y:1991:i:4:p:1083-1090.
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    Cited by:

    1. Casamatta, Georges & Rausser, Gordon & Simon, Leo, 2011. "Optimal taxation with joint production of agriculture and rural amenities," Resource and Energy Economics, Elsevier, vol. 33(3), pages 544-553, September.
    2. Cattaneo, Andrea & Hellerstein, Daniel & Nickerson, Cynthia J. & Myers, Christina, 2006. "Balancing the Multiple Objectives of Conservation Programs," Economic Research Report 7257, United States Department of Agriculture, Economic Research Service.
    3. Rizov, Marian, 2005. "Rural development under the European CAP: The role of diversity," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 42(4), pages 621-628.
    4. Rizov, Marian, 2004. "Rural development and welfare implications of CAP reforms," Journal of Policy Modeling, Elsevier, vol. 26(2), pages 209-222, February.
    5. Blandford, David & Boisvert, Richard N., 2002. "Non-Trade Concerns And Domestic/International Policy Choice," Working Papers 14615, International Agricultural Trade Research Consortium.
    6. Simona Kubíčková, 2004. "Support of the landscape amenity function of agriculture and trade liberalisation [Podpora krajinotvorné funkce zemědělství a liberalizace trhu]," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 52(6), pages 77-86.
    7. Lars Gårn Hansen & Carsten Lynge Jensen, 2014. "Jointness through vessel capacity input in a multispecies fishery," Agricultural Economics, International Association of Agricultural Economists, vol. 45(6), pages 745-756, November.
    8. Xia, Yin, 2004. "University Basic Research And Applied Agricultural Biotechnology," 2004 Annual meeting, August 1-4, Denver, CO 20187, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Shumway, C. Richard, 1995. "Recent Duality Contributions In Production Economics," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(1), pages 1-17, July.
    10. Just, Richard E., 1993. "Discovering Production and Supply Relationships: Present Status and Future Opportunities," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 61(01), pages 1-30, April.
    11. Kwon, Oh Sang & Yun, Won-Cheol, 2003. "Measuring economies of scope for cogeneration systems in Korea: a nonparametric approach," Energy Economics, Elsevier, vol. 25(4), pages 331-338, July.
    12. Asunka, Samuel & Shumway, C. Richard, 1996. "Allocatable Fixed Inputs and Jointness in Agricultural Production: More Implications," Agricultural and Resource Economics Review, Cambridge University Press, vol. 25(2), pages 143-148, October.
    13. Chang, Hung-Hao & Boisvert, Richard N. & Blandford, David, 2005. "Achieving Environmental Objectives Under Reduced Domestic Agricultural Support and Trade Liberalization: An Empirical Application to Taiwan," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 34(1), pages 1-16, April.
    14. Yang, Dennis Tao & An, Mark Yuying, 2002. "Human capital, entrepreneurship, and farm household earnings," Journal of Development Economics, Elsevier, vol. 68(1), pages 65-88, June.
    15. Jordan, Brett, 2018. "Economics literature on joint production of minerals: A survey," Resources Policy, Elsevier, vol. 55(C), pages 20-28.
    16. Carpentier, Alain & Letort, Elodie, 2010. "Simple econometric models for short term production choices in cropping systems," Working Papers 210387, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).

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