measuring excess capital capacity in agricultural production we introduce the concept excess capital capacity and employ a stochastic input requirement frontier to measure excess capital capacity in agricultural production we also propose a two step estimation method that allows endogenous regressors in stochastic frontier models the first step uses generalized method of moments to get consistent estimates of the frontier parameters in the presence of endogenous regressors the second step uses maximum likelihood to measure excess capital capacity and evaluate the factors that influence it the empirical application to dutch cash crop farms found varying degrees of excess capital capacity the policy implications of excess capital capacity are discussed

the dynamics of individuals fat consumption consumers are increasingly aware of the link between their lifestyle choices and the risk of noncommunicable diseases a dynamic approach incorporating this linkage in food demand is developed where consumers maximize utility over time by choosing fat intake to control their cumulative fat level the resulting dynamic indirect utility function and household data on meat fish and dairy consumption are used to estimate a censored demand system results show that consumers consciously adjust but not instantaneously their cumulative fat level highly educated households have a faster rate of adjustment of cumulative fat when cumulative fat level increases consumers shift to dairy or white meat from red meat products

farmers investment behavior an empirical assessment of two specifications of expectations the capital investment decision is modeled and two different assumptions about expectations are compared and tested using panel data for dutch dairy farms the utilization of panel data allowed to account for the possibility that the intercept in the function for capital varies over the farms the models are estimated using the generalized method of moments gmm for dynamic panel data the model based on static expectations fits the data well the results obtained from the rational expectations model are not consistent with the theory

dynamic adjustment in the us beef market with imports abstract this paper hypothesizes that while there are important qualitative differences in domestic beef and imported beef beef and cattle imports also represent attempts by the us beef processing and wholesale sector to adjust to short run changes in supply and demand dynamic production theory is applied to the problem to test for this adjustment process and presents a production theory approach to meat trade that has previously been included in demand functions the results of this analysis suggest that the method used provides a reasonable and appropriate representation of the import behavior of the us processing and wholesale beef sector

economic growth and greenhouse gases in europe a non radial multi sector nonparametric production frontier analysis abstract energy use has become a topical issue when assessing the economic growth of countries indeed energy use gives rise to greenhouse gas emissions which are undesirable side products of economic growth in this paper we present a non radial multi sector nonparametric production frontier approach specially tailored for addressing this issue our approach is consistent with previous works and in line with recent policy and regulation implementations we also make use of second stage country and sector level regression analyses to investigate how the efficiency results are affected by exogenous factors we apply our method to the case of 10 sectors in 19 european countries our results highlight the need for policy and regulation implementations for each sector individually indeed our efficiency and regression results show that there exists a sector heterogeneity and that the room for increasing economic growth reducing greenhouse gas emissions is clearly different for each sector in every country finally our results highlight two sectors 1 agriculture and 2 electricity gas and water and that the europe 2020 objectives are well set since they target the most inefficient countries sectors

commuting transport tax reform and the labour market employer paid parking and the relative efficiency of revenue recycling instruments in this paper the welfare effects of a budget neutral increase in taxes on car commuters are studied in a model that takes into account the presence of employer paid parking at the workplace it is found that the presence of employer paid parking substantially increases the welfare effect of such a tax reform independent of the use of the revenues congestion taxes not only correct congestion externalities they also reduce the inefficiency caused by employer paid parking moreover different congestion effects of alternative recycling instruments and the presence of employer paid parking jointly imply that recycling the tax revenues via higher public transport subsidies may yield much more favourable welfare effects than previously believed it can easily outperform recycling the tax revenues via lower labour taxes finally cashing out parking costs to public transport users is found to generate substantial positive welfare effects numerical analysis confirms the theory

the dynamics of urban traffic congestion and the price of parking we consider commuting in a congested urban area while an efficient time varying toll may eliminate queuing a toll may not be politically feasible we study the benefit of a substitute a parking fee at the workplace an optimal time varying parking fee is charged at zero rate when there is queuing and eliminates queuing when the rate is non zero within certain limits inability to charge some drivers for parking does not reduce the potential welfare gain drivers who cannot be charged travel when there is queuing in some cases interaction between morning and evening commutes can be exploited to remove queuing completely

a revenue function approach to the measurement of output substitution possibilities in agriculture the purpose of this article is to calculate hicksian and marshallian estimates of output substitution possibilities in an agricultural industry the hicksian elasticities or net substitution possibilities are measured within a revenue maximizing framework holding input levels constant the marshallian elasticities that encompass both net substitution and expansion effects are measured within a profit maximizing framework allowing both output and input levels to vary the results are empirically reasonable and consistent with the duality theory for revenue and profit maximizing behavior a notable empirical result is that in the very short run or market period with input levels held constant there exists considerable scope for changing the output composition between crops and cattle on cattle farms

output input and productivity measurement in u s agriculture 1948 79 tornqvist theil indexes of outputs and inputs are constructed these data are used to construct indexes of productivity growth over the postwar period the productivity indexes can be derived from a flexible multioutput multifactor representation of the structure of production constrained to constant returns to scale total factor productivity grew at an average annual rate of 1 75 compared with 1 70 per year estimated by the u s department of agriculture the similar estimates of productivity growth overshadow some important differences in measurement of individual inputs the major effort in measuring agricultural productivity is undertaken by the u s department of agriculture usda an american agricultural economics association task force on measuring productivity has examined the sources and procedures used in constructing the official statistics see loomis and barton lambert barton and durost the task force recommended that the usda adopt a series of specific improvements for constructing certain inputs and use an indexing procedure that does not impose a priori restrictions on the structure of production 1 this paper presents revised indexes of outputs and inputs the data are used to construct indexes of productivity growth over the postwar period the productivity indexes can be derived from a flexible multioutput multifactor representation of the structure of production the translog transformation function constrained to constant returns to scale 2 the indexes of outputs and inputs have the same form and their ratio coincides with the estimate of productivity growth

investment in u s agriculture resource adjustment problems in u s agriculture are motivated against the background of the farm problem the adjustment cost hypothesis is invoked to specify and estimate consistently a system of dynamic investment demand and output supply equations by utilizing recent advances in dynamic duality theory the investment demand equations assume the form of a multivariate flexible accelerator results indicate that labor capital services and land exhibited quasi fixity while intermediate materials were a variable factor this can be construed as a form of asset fixity within aggregate u s agriculture the univariate flexible accelerator hypothesis is rejected

acreage decisions under risk the case of corn and soybeans an acreage supply response model is developed under expected utility maximization the resulting framework is used to specify and estimate a system of risk responsive acreage equations for corn and soybeans in the united states particular attention is given to the truncation effects of government price supports on the distribution of corn and soybean prices also a wealth variable is included in the acreage equations the empirical results indicate that risk and wealth variables play an important role in cornsoybean acreage decisions the analysis also shows that cross commodity risk reduction is important in acreage allocation decisions

dynamic efficiency estimation the shadow cost approach is developed in the context of the dynamic duality model of intertemporal decision making to formulate theoretical and econometric models of dynamic efficiency the dynamic efficiency model is applied to a panel of 72 u s major investor owned electric utilities using fossil fuel fired steam electric power generation over the period 1986 1999 the major results show that most electric utilities underutilized fuel relative to the aggregated labor and the maintenance input and overutilized capital in production states adopting a deregulation plan improve the performance of utilities in terms of the technical efficiency of variable inputs

asset fixity and investment asymmetry in agriculture fixed asset theory implies that it is more difficult to dispose of capital specific to agricultural production than to add to the stock of specialized capital this theory is tested by determining whether transitions between states of disinvestment are as likely as transitions between states of investment of the twenty four annual capital stock series analyzed evidence of asymmetry between investment and disinvestment is strong in eight cases weak in four and insignificant in twelve there is considerable although mixed evidence of asymmetry for tractors farm and nonfarm and other specialized vehicles since world war ii and for agricultural machinery

a soil quality index and its relationship to efficiency and productivity growth measures two decompositions this article reconciles two notions of soil quality indexes with the economic concepts of technical efficiency and productivity growth an example uses data from the u s department of agriculture s experimental fields in maryland and data envelopment analysis techniques to estimate a soil quality index consistent with the notion of technical efficiency common regression techniques shed additional light on the role of individual soil quality properties in a very restricted linear approximation of the estimated soil quality index

imperfect price deflation in production systems numeraire prices that are measured with error create challenges for econometric estimation a straightforward approach for a model with linear input demands such as generated from a quadratic normalized profit function is proposed where the numeraire price is measured with error numeraire measurement error is likely because expected output price is measured imperfectly by actual output price an approach using generalized method of moments is developed to estimate such errors in variables systems that avoids use of extra sample data or additional structural specifications monte carlo examination of small sample properties shows promise measurement error is statistically significant using aggregate u s agricultural data

market based systems for reducing chemical use in agriculture in the united states this study uses a computable general equilibrium cge model of the u s economy to estimate the economic effects of agricultural fertilizer and pesticide input reductions on individual farm sectors and on the economy as a whole the costs of reducing agricultural chemicals using a market based approach and a command and control approach are compared the real cost to society of restrictng fertilizer and pesticide use by 20 percent across all uses is estimated to be 2 3 billion a market based approach that would provide incentives to reduce chemical use in the most cost efficient manner would be about 10 percent less costly

wheat demand in japanese flour milling industry a production theory approach a production approach based on the translog cost function is used to analyze import demand for wheat differentiated by class and country of origin in the japanese wheat flour milling industry results indicate that us wheat faces strong competition in the japanese wheat market but its multiple classes and end use characteristics enable the us to preserve the largest market share in japan

dynamic input demand functions and resource adjustment for us agriculture state evidence abstract the paper presents an econometric model of dynamic agricultural input demand functions that include research based technical change and autoregressive disturbances and fits the model to annual data for a set of state aggregates pooled over 1950 1982 the methodological approach is one of developing a theoretical foundation for a dynamic input demand system and accepting state aggreage behavior as approximated by nonlinear adjustment costs and long term profit maximization although other studies have largely ignored autocorrelation in dynamic input demand systems the results show shorter adjustment lags with autocorrelation than without dynamic input demand own price elasticities for the six input groups are inelastic and the demand functions possess significant cross price and research effects

technical change and applications of dynamic duality to agriculture reply larson has made three basic points in his comment on the incorporation of technical change in dynamic duality models a appending a time trend onto the empirical model to account for technical change is inconsistent with an autonomous theoretical model b a current value function v discounted to time to 0 to t should not be confused with a value function j discounted to time t 0 and c the firm s expectations of embodied technical change should be explicitly formulated in the theoretical model the first issue focused on the vasavada and chambers paper and the last two issues were addressed to the howard and shumway paper we will respond to each of these points in order first larson is correct that vasavada and chambers and several other dynamic duality studies have maintained an autonomous theoretical model but estimated a nonautonomous empirical model the bridge between the two models is the assumption of static ex ante technology expectations on the part of producers with ex post awareness of technical change on the part of the analyst while this assumption has seldom been made explicit in research reports and may appear inconsistent its practical importance is often minor for example although we reported results in our ajae article only for the nonautonomous theoretical and empirical model we also estimated the parameters for the autonomous theoretical nonautonomous empirical model there were no differences between the two models in any of the test conclusions and only minor differences in the estimated rateof adjustment parameters second larson s equation 11 is essentially the same as our equation 3 except that he defines a current value function v discounted to time to o to 0 while we define an initial value function j discounted to time t 0 larson alleges that the discounting period alters the interpretation of the parameter estimates however the output supply variable input demand and investment equations are all unaffected by the discounting period thus the interpretation of the estimated output supply and variable input demand equations the rate ofadjustment parameters and associated marginal values of investment in quasi fixed inputs are the same whether one assumes the decision maker acts at time t 0 or t to o to oo finally larson correctly notes that we did not explicitly discuss how embodied technical change was included in our theoretical model the implicitly maintained assumption was larson s third alternative i e that firms have static embodied technology expectations although this assumption may seem counterintuitive given our maintained hypothesis of nonstatic disembodied technology expectations larson s other alternatives also carry their own dilemmas his first alternative was that firms could forecast future embodied technical change with perfect accuracy an impossibility and his second was that firms expect disembodied technical change but actually experience embodied technical change each alternative maintains some conceptual baggage the implications and empirical seriousness of which have not been fully explored we are appreciative of larson s identification of these issues and for the opportunity to enter into a dialogue on some of their theoretical and practical aspects we would also note a printing error of some consequence near the bottom of the second column of p 838 of our paper it should read f4 0

measurement of total factor productivity growth and biases in technological change in western australian agriculture this study investigates productivity growth in broad acre agriculture in western australia tornqvist indices of three output groups crops sheep products and other and five input groups livestock materials and services labour capital and land are constructed and discussed indices of total output and total inputs are also derived and used to form an index of total factor productivity that is observed to grow at an average annual rage of 2 7 the input and output indices are also used in the estimation of output supply and input demand equations derived from a flexible profit function the generalized mcfadden functional form is used because it is possible to impose global curvature upon it without loss of flexibility asymptotic chi square tests reject the hypotheses of hicks neutral technical change in inputs and in outputs technical change is observed to be materials and services saving relative to the other input groups and also appears to favour wool and sheepmeat production relative to the other output groups

nonparametric estimates of the components of productivity and profitability change in u s agriculture recent theoretical advances in total factor productivity tfp measurement mean that tfp indexes can now be exhaustively decomposed into unambiguous measures of technical change and efficiency change to date all applications of this new methodology have involved decomposing indexes that have poor theoretical properties this article shows how the methodology can be used to decompose a new tfp index that satisfies all economically relevant axioms from index theory the application is to state level data from 1960 to 2004 in most states the main drivers of agricultural tfp change are found to have been technical change and scale and mix efficiency change

measuring the benefits of environmental change using a duality approach the case of ozone and illinois cash grain farms abstract the measurement of the economic effects of a changing environment can be complex and costly this study uses a duality approach to quantify the relationship between ambient levels of ozone and economic damage on illinois cash grain farms econometric estimates from producers profit functions indicate a significant negative relationship between ozone and the levels of profit and output these findings are consistent with results from more traditional ecosystem assessment procedures given the data and experimentation costs associated with traditional approaches this study s results point to duality as a potentially powerful tool for assessing the economic effects of various environmental phenomena

the intertemporal dimension of neoclassical production theory abstract the aim of this survey paper is to provide a guide to the literature on optimal dynamic factor demands to the non specialist reader interested in applied work we start with the distinction between variable and quasi fixed factors of production and use these to characterize the firm s temporary equilibrium we then review the optimal intertemporal behaviour of the firm using the notion of adjustment costs as a means to solve the firm s optimization problem this process gives rise to a system of interrelated dynamic factor demands in a flexible accelerator format theoretical difficulties and empirical limitations of this model are discussed this fact leads us to review the theory of intertemporal duality we next analyze the issue of expectations in this class of dynamic models a section reviewing the empirical work on dynamic factor demands follows after which we offer some concluding remarks

productivity growth in u s agriculture under dynamic adjustment a dynamic measure of productivity growth adjusted for deviations from the long run equilibrium is established within an adjustment cost framework an empirical application to u s agriculture is presented which permits identifying the dynamic linkages between technical change and productivity growth in u s agriculture total factor productivity as dynamically measured grew at 1 50 per annum the combined effect of scale quality adjusted input growth and long run disequilibrium input use contributes only 3 44 of the growth while technical change dominates the growth of total factor productivity

dynamic factor demand equations in u s and canadian agriculture abstract this research provides one of the first empirical estimates of a data based dynamic factor demand model for american and canadian agriculture models such as these deserve more widespread use in the empirical analysis of agriculture these models have the advantage that they do not impose inappropriate dynamics on the data rather they permit the data to select the appropriate dynamics we use a model originally developed by anderson and blundell this model is a general first order dynamic model which contains as testable hypothesis several simpler models this model permits us to estimate the long run agricultural production structure as a subset of the dynamic parameter estimates we will test this long run structure for symmetry homotheticity and neutral technical change the estimated models may be used to test for three alternative dynamic structures in the limit dynamics may not be needed and we can test for the static long run equilibrium model two intermediate cases are the autoregressive and the partial adjustment models which are simpler than the general model but still include dynamics our results suggest that the long run equilibrium model is unsatisfactory in both countries a dynamic model is needed in both countries the two more restricted dynamic models are rejected the general dynamic model is required in canada the long run equilibrium structure is homothetic with neutral technical change in the united states homotheticity is also accepted but neutral technical change is rejected

a temporal and spatial equilibrium analysis of commuter parking abstract this paper examines the effects of parking availability on morning rush hour congestion and assesses the relative efficiency of road tolls and parking fees without pricing drivers occupy parking in order of increasing distance from the cbd a time varying toll can prevent queueing but does not affect the order in which parking spots are taken optimal location dependent parking fees may be superior they do not eliminate queueing but induce drivers to park in order of decreasing distance from the cbd thereby concentrating arrival times closer to work start times competitively set parking fees do nothing to reduce queueing and are relatively inefficient

china s food economy to the twenty first century supply demand and trade this paper accounts for the structural changes now taking place in china and suggests that china is not likely to become either an enormous importer or exporter of grain ultimately though china s grain balances will depend on decisions made by chinese policymakers rather than natural resource constraints p v this abstract was borrowed from another version of this item

dynamic model of fresh fruit promotion a household production approach many studies consider the dynamic effects of commodity promotion on demand but few derive the theoretical basis for these effects in a model of optimal consumer behavior this study develops a dynamic household production model of u s fresh fruit consumption which it uses to evaluate the effectiveness of advertising and promotion expenditures by the washington apple commission estimates from a dynamic dual generalized leontief system show direct advertising to be marginally more effective than retail promotion in increasing apple sales but advertising has positive spillover effects to sales of other fruits whereas promotion reduces sales of competing products

toward a new conception of the environment competitiveness relationship accepting a fixed trade off between environmental regulation and competitiveness unnecessarily raises costs and slows down environmental progress studies finding high environmental compliance costs have traditionally focused on static cost impacts ignoring any offsetting productivity benefits from innovation they typically overestimated compliance costs neglected innovation offsets and disregarded the affected industry s initial competitiveness rather than simply adding to cost properly crafted environmental standards can trigger innovation offsets allowing companies to improve their resource productivity shifting the debate from pollution control to pollution prevention was a step forward it is now necessary to make the next step and focus on resource productivity

human capital and growth abstract this paper describes a growth model with the property that human capital accumulation can account for all observed growth the model is shown to be consistent with evidence on individual productivities as measured by census earnings data the central hypothesis is that we learn more when we interact with more productive people

the production structure and demand for labor in postwar japanese agriculture 1952 82 this paper analyzes the factor relations of postwar japanese agriculture to identify the factors which explain a significant decline in labor in the agricultural sector a nonhomothetic and hicks non neutral translog cost function is estimated the results of the decomposition analysis based on the estimates show that biased technical changes and nonhomotheticity together with price induced factor substitutions play an important role in easing the transfer of agricultural labor to the nonagricultural sectors the results also suggest that the biased technical change is consistent with the hicksian induced innovation hypothesis

corporate failure prediction in the european energy sector a multicriteria approach and the effect of country characteristics this study examines the development of corporate failure prediction models for european firms in the energy sector using a large dataset from 18 countries the construction of the models is based on a multiple criteria decision aid mcda approach taking into account both ordinal criteria and nominal country sector effects the analysis is based on different modeling specifications first traditional financial variables are examined which are then extended with additional country level data related to the economic and business environment as well as data about the energy efficiency policies of the countries and the characteristics of their energy markets and networks the results indicate that energy related attributes have high discriminating power and add valuable information compared to the other attributes

a political economy model of road pricing abstract in this paper we use a simple majority voting model to study the introduction of urban congestion tolls the model allows for different types of uncertainty and considers different uses of the toll revenues the following results are obtained first we show that individual uncertainty with respect to modal substitution costs may imply that a majority votes against road pricing ex ante although a majority would have been in favor after its introduction ex post moreover if a majority is against road pricing ex ante there will also be no majority for organizing an experiment that would take away the individual uncertainty second political uncertainty with respect to the use of the revenues corroborates the finding that ex ante more voters will be against the introduction of tolls third both types of uncertainty suggest that fewer voters are against road pricing when toll revenues are used to subsidize public transport than when they are redistributed to all voters importantly the results of this paper are consistent with a number of recent empirical observations on efforts to introduce road pricing including the systematic rejection of road pricing in referenda the more favorable attitudes towards road pricing after than before its introduction and tying the toll revenues to support public transport

research and extension expenditures and productivity in japanese agriculture 1960 1990 abstract this paper investigates the cause for the decline in the growth of productivity in japanese agriculture since the late 1960s for this objective it investigates the effects of research and extension r e activities on the extent and the direction of the bias of technological change in japanese agriculture for the period 1960 1990 based on the translog cost function framework empirical results show that the cost reducing effects of r e measured in terms of the absolute value of the cost r e elasticity increased slightly from 0 194 in 1960 to 0 205 in 1965 and then decreased consistently to 0 110 in 1990 this finding is broadly consistent with the finding of the decline or slowdown in agricultural productivity since the late 1960s the bias due to r e was found to be toward labor intermediate inputs and other inputs saving on the one hand and machinery and land using on the other labor saving and machinery using biases are consistent with the hicksian induced innovation hypothesis

an adjustment cost rationalization of asset fixity theory this article integrates a classic concept in production economics g l johnson s asset fixity theory with the dynamic adjustment cost model until now the literature has considered these two to be incompatible by relaxing the smoothness assumption of the adjustment cost function at the origin the theory of costs of adjustment can provide a rigorous endogenization of asset fixity g l johnson and edwards results are then obtained when the linearity assumption of the adjustment cost function is imposed the work reported here also indicates that both smoothness at the origin and symmetry of adjustment cost function should be subject to empirical tests

supply demand and technology in a multiproduct industry texas field crops the purpose of this paper is to examine the structure of agricultural production for six texas field crops cotton grain sorghum wheat corn rice and hay which account for nearly 95 of recent field crop value specific objectives are to a test the structure of technology to determine i if output and input utilization choices for individual products are independent of production decisions about other outputs and ii if products and or inputs can be consistently aggregated b estimate a coherent set of interrelated supply functions for the six commodities and input demand functions for fertilizer and hired labor because the empirical focus of this paper is specific to one state the results will be of limited value for interpreting specific production relationships elsewhere however the problem is of common interest in production agriculture and the techniques used demonstrate an important application of dual modeling

dynamic and static behaviour with respect to energy use and investment of dutch greenhouse firms dutch greenhouse horticulture firms are energy intensive and major emitters of greenhouse gases this paper develops a theoretically consistent model that is able to describe the greenhouse firms behaviour regarding energy use and investments in energy technology the behaviour of the firm is modelled using a combination of a dynamic cost function and a static profit function framework the optimal quantity of energy is derived from the link between these two functions the model is applied to a panel of 97 dutch greenhouse firms over the period 2001 2008 the results show that most dutch greenhouse firms shift from being net electricity users to net electricity producers in the long term investing in energy capital contributes to reducing net energy use however it increases the quantity of carbon dioxide emissions due to an increase in electricity production a 1 increase of the price of gas reduces carbon dioxide emissions by 1 6

regional and temporal impacts of technical change in the u s dairy sector the regional and temporal impacts of technical change in the u s dairy industry are assessed in terms of production and income distribution through a dynamic equilibrium model dynamic duality is used to obtain the production equations the traditional milk producing regions of the northeast and lake states will maintain their base of national output while the pacific region increases its base at the expense of the remaining regions regional dairy income varies temporally advancements in technology are likely to accelerate the treadmill process in agriculture the most dramatic impacts may initially occur in the dairy sector where growth hormones may soon be approved commercially given the anticipated productivity gains and adjustment problems an ex ante assessment of the distributional impacts of new technologies in the dairy sector

credit constraints their existence determinants and implications for u s farm and nonfarm sole proprietorships the objective of this study is to determine the effect of credit constraints on production for farm and nonfarm sole proprietorships a propensity score matching estimator is employed to provide unbiased estimates of the production impacts of being denied credit the empirical results demonstrate that the value of production is significantly lower for credit constrained sole proprietorships if this drop in the value of production is aggregated to a national level it constitutes only 3 and 13 of total value of production for farm and nonfarm sole proprietorships respectively copyright 2009 oxford university press

singularity and autoregressive disturbances in linear logit models the implications of including autoregressive disturbances in linear logit models of demand systems are explored it is argued that the normality assumption of the error terms is more appropriate in the linear logit model than in a share equation model with additive disturbances commonly found in the literature autoregressive disturbances and their implications for model estimation are discussed in that context both theoretical arguments and empirical evidence are presented in favor of the logit specification given the presence of serial correlation

factor demands in the u s food manufacturing industry this paper analyzes the demand for labor capital and energy in the u s food manufacturing industry using allen and morishima elasticities of substitution the demand for capital is more elastic than for labor and energy and these production factors are substitutable especially between capital and labor

a dynamic adjustment model for u s agriculture 1948 79 abstract a multioutput model is developed within the adjustment cost framework to analyze the structure of dynamic adjustments in u s agriculture during the post war period an important feature of this model is that the econometric model is consistent with dynamic economic theory fluctuations in capital stocks variable inputs and outputs are explained by changing opportunity costs empirical results indicated that durable equipment farm produced durables and family labor exhibited significant rigidity in adjustment as a response to exogenous shocks surprisingly the hypothesis that real estate was a variable input could not be rejected the univariate flexible accelerator hypothesis which is widely maintained in most agricultural adjustment studies is inconsistent with the data

common agricultural policy effects on dynamic labour use in agriculture abstract the aim of this study is to investigate the effects of direct payments and rural development measures of the eu s common agricultural policy cap on employment in agriculture we work with a dynamic labour demand equation augmented by the full set of policy instruments of the cap which is estimated on a panel dataset of 69 east german regions we present results for four estimators which differ in how they eliminate the fixed effects and how they address the endogeneity of the lagged dependent variable the results suggest that there were few desirable effects on job maintenance in agriculture while there is some indication that investment subsidies have halted labour shedding on farms a rise in the general wage level reduced labour use in agriculture changes in direct payments had no employment effects generally labour adjustment exhibits a strong path dependency

cost efficiency in u s corn production diewert s quadratic lemma is used to derive indexes of intertemporal and interregional cost efficiency and of economies of scale for a sample of u s corn regions using u s department of agriculture farm enterprise survey data the results indicate that intertemporal cost efficiency in u s corn production increased 1 3 per year on average between 1974 and 1983 regions in illinois and iowa have a competitive advantage in corn production over those in indiana and nebraska between 1974 and 1983 very large corn enterprises 500 1 000 acres were 4 8 more cost efficient than large enterprises 300 460 acres and 8 15 more efficient than medium size corn enterprises 175 290 acres

winning or losing from dynamic bottleneck congestion pricing the distributional effects of road pricing with heterogeneity in values of time and schedule delay abstract this paper analyses the efficiency and distributional impacts of congestion pricing in vickrey s 1969 dynamic bottleneck model of congestion allowing for continuous distributions of values of time and schedule delay we find that congestion pricing can leave a majority of travellers better off even without returning the toll revenues to them we also find that the consumer surplus losses or gains from tolling are not strictly monotonic in the value of time because they also depend on the value of schedule delays the greatest losses are not incurred by drivers with the lowest value of time but by users with an intermediate value of schedule delays and the lowest value of time for that value of schedule delays for second best pricing with an untolled alternative the pattern of distributional effects is quite similar to that for first best pricing in contrast with results from prior static models users who are indifferent between the two alternative routes are not the ones who gain least from this type of second best pricing our results suggest that in assessing the distributional impacts of road congestion pricing it is important to take into account both the distribution of the value of time and of the value of schedule delays as well as the dynamics of departure time choice

output response to prices and public investment in agriculture indonesian food crops abstract this paper analyzes dynamic food crop supply response in indonesia the effects of technology prices and investments on output growth for rice corn soybean and cassava are examined the analysis generates crop wise area yield and input demand parameters suitable for the evaluation of price and investment policies and shows the large impact of public investment in agricultural research extension and irrigation on long run output growth in indonesia elimination of the fertilizer subsidy and reinvestment of the resulting fiscal savings in research extension and irrigation would produce large benefits

polices for increasing energy efficiency thirty years of experience in oecd countries energy efficiency improvement was an important phenomenon in the global energy balance over the past 30 years without energy efficiency improvements the oecd nations would have used approximately 49 more energy than was actually consumed as of 1998 this paper first reviews energy intensity trends for the major oecd nations since 1973 considering how much of the overall reduction in e gdp was due to energy efficiency improvement and how much was due to structural change the bulk of the paper examines the energy efficiency policies and programs adopted in japan united states and western europe commenting on their effectiveness and energy savings impacts where possible the paper also reviews the energy efficiency policies and programs adopted in california this experience shows that well designed policies can result in substantial energy savings as demonstrated in the united states where nine specific policies and programs reduced primary energy use in 2002 by approximately 11 substantial energy savings also occurred in japan some european countries and in the electricity sector in california

does energy efficiency improve technological change and economic growth in developing countries abstract does a trade off exist between energy efficiency and economic growth this question underlies some of the tensions between economic and environmental policies especially in developing countries that often need to expand their industrial base to grow this paper contributes to the debate by analyzing the relationship between energy efficiency and economic performance at the micro total factor productivity and macro level countries economic growth it uses data on a large sample of manufacturing firms across 29 developing countries to find that lower levels of energy intensity are associated with higher total factor productivity for the majority of these countries the results are robust to a variety of checks suggestive cross country evidence points towards the same relation measured at the macro level as well

short and long run adjustments in dairy production a profit function analysis a dual profit model is developed to analyse the structure of dairy technology using farm level data for vermont potential short and long run effects of milk price reductions on output supply input demand farm size and profitability are studied the observed levels of the quasi fixed inputs family labour and herd size are found to be significantly lower than their optimal or long run equilibrium values which is consistent with a continuing shift towards fewer and larger dairy farms the analysis suggests that lower milk prices threaten the short run survival of small and medium size farms and reduce the optimal farm size in the long run

off farm labour and the structure of us agriculture the case of corn soybean farms while the growing importance of off farm earnings suggests large benefits accrue to farmers from efforts to expand off farm income opportunities economic well being also depends on greater efficiency to comprehensively gauge the economic health of farm operator households off farm income is interpreted as an output along with corn soybeans livestock and other crops to accomplish this task two related methodologies were used first using 2000 data a multi activity cost function was set up to analyse labour allocation decisions within the farm operator household and also to estimate returns to scale and scope second using 1996 2000 data an input distance function approach was followed to estimate returns to scale cost economies and technical efficiency and the relative performance of farm operator households with and without off farm wages and salaries compared the cost function and input distance function results both suggest that off farm outputs and inputs can be modelled in a multi activi

production economics worthwhile investment abstract agricultural production economics research is examined within a broad framework of scientific development and utilization recent findings in selected areas of the subdiscipline are examined and opportunities for further fruitful inquiry are identified a few stylized facts emerge from recent work and suggest the need for much careful hypothesis testing model exploration and empirical sensitivity analysis in the future

the effect of supply management on herd size in alberta dairy a supply management program limits the aggregate supply of a commodity often through the use of marketable quota licenses the static aggregate welfare effects of supply controls are well known but the farm level dynamic effects on dairy investment are not a theoretical cost of adjustment model is used to show that supply management reduces the rate of quasi fixed input adjustment at the farm level in fact when a quasi fixed input is complementary to quota licenses investment or disinvestment can be impaired to such an extent that the input moves away from the long run equilibrium as a result overinvestment in this input can significantly reduce productivity growth

the structure of u s agricultural technology 1910 78 this paper utilizes 1910 78 time series data and a single product aggregate translog profit function to measure the structure of u s agricultural technology duality relations are used to devise a multifactor measure of biased technical change a measure of nonhomotheticity is introduced which indicates the effects scale change has had on aggregate cost shares the empirical analysis finds that different nonhomothetic technologies characterized the prewar and postwar periods differing technical change biases are consistent with relative price trends during the two periods showing that the long run structure of u s agricultural technology has been consistent with the hayami ruttan induced innovation theory

asymmetric adjustment of dynamic factors at the firm level presents a study which addressed the deficiencies of previous studies the specification and estimation in the modeling of asymmetry and zero gross investment in the agricultural industry reference to previous studies on asymmetry information on the standard dual model results of the study

implementing second best environmental policy under adverse selection abstract a key obstacle to practical application of mechanism design theory to regulation is the difficulty of obtaining consistent beliefs regarding information that theoretical models assume to be commonly held this article presents a solution to this problem by developing an easily implemented empirical methodology with which the government can use available data to develop beliefs regarding the technology and distribution of types in a regulated sector characterized by hidden information results are used to calibrate a second best land conservation mechanism and evaluate its cost relative to simpler alternatives

agricultural production technologies with systematic and stochastic technical change a production system modeling tool is developed that implements recent work on autoregressive and endogenous stochastic production technologies associated with generalized fechner thurstone gft optimizing functions a gft class production system is used to evaluate the empirical support for technology specifications inherent in the neoclassical theoretic structure of an agricultural production region little likelihood support is found for zero serial correlation elimination of systematic technology changers from the production system strict neoclassical production technologies hicks neutral technical change or zero homogenous factor demand functions

dynamic adjustment in us agriculture under climate change we construct a stochastic dynamic dual model to investigate the structural adjustment of two aggregate output and three aggregate input categories in us agriculture under stochastic climatic change more than a century of national annual data 1910 2011 is used in the empirical analysis no constraints on asset fixity are imposed results indicate that with rational expectations both output categories as well as all input categories exhibit quasi fixity in response to market change and stochastic climate change crops adjust more than twice as fast as livestock 49 versus 20 of the way toward their long run equilibrium in one year fertilizer adjusts most rapidly toward equilibrium levels 88 in one year and capital adjusts most slowly 5 in one year labor oscillates rather than converging smoothly toward equilibrium its distance from equilibrium is the same as if it adjusted 59 of the way toward its optimal level in one year failing to anticipate climate change dramatically slows the estimated rate of adjustment for two netputs and modestly speeds the rate for two others thus likely increasing overall adjustment costs failing to account for uncertainty in anticipated climate change has little impact on adjustment rates

random queues and risk averse users we analyse nash equilibrium in time of use of a congested facility users are risk averse with general concave utility queues are subject to varying degrees of random sorting ranging from strict queue priority to a completely random queue we define the key no residual queue property which holds when there is no queue at the time the last user arrives at the queue and prove that this property holds in equilibrium under all queueing regimes considered the no residual queue property leads to simple results concerning the equilibrium utility of users and the timing of the queue

estimating investment rigidity within a threshold regression framework the case of u s hog production sector this article addresses the issues of investment disinvestment asymmetry and a possible existence of a sluggish regime in the demand for a quasi fixed input in the u s hog production sector adopting a new threshold estimation procedure quarterly data from 1970 through 2002 are used to estimate a regimedependent investment demand equation for a quasi fixed input taking sows as a proxy the results support the existence of three regimes over alternative specifications precluding the sluggish regime confirming the existence of asset fixity in hog production the results also highlight the importance of accounting for investment rigidity when estimating hog supply and variable input demands the importance of the u s swine industry is far reaching and can be highlighted by its economic contribution to different sectors along the supply chain involving hog producers pork processors and consumers according to the national pork producers council nppc 2002 the industry supported an estimated 800 000 domestic jobs in 2002 and generated more than 72 billion in total domestic economic activities furthermore the united stated is a leading pork exporter with its exports valued at 1 5 billion in 2002 of the 72 billion worth of domestic economic activities receipts from hog sales account for more than 11 billion per year the hog sector also contributes an additional 27 billion from the utilization of corn soybean and other inputs nppc the structure of the hog production sector has changed dramatically during the past decade with large hog operations becoming increasingly dominant between 1994 and 2004 the proportion of hog operations with more than 2 000 hogs has doubled from 38 to 79 of all hogs

testing asset fixity for u s agriculture two problems which have concerned agricultural economists since the great depression are low farm resource returns and agriculture s tendency to maintain high aggregate production in the face of declining real product prices the latter phenomenon referred to as irreversibility of supply has spawned a significant literature on approaches to estimating and testing irreversible supply curves houck tweeten and quance while there are numerous explanations of these problems it is widely accepted that both are at least partially due to some asset fixity within agriculture that is in the aggregate there are certain productive factors which are trapped in agriculture attempts to explain asset fixity are not new galbraith and black early argued that high fixed costs contribute to a lumpiness of important factors which makes their temporary reduction or reorganization so expensive as to be unprofitable in the short run later g l johnson hypothesized that productive assets are trapped in agriculture because of a divergence between acquisition costs and salvage value formal developments are in edwards hathaway and johnson and quance both explanations have been challenged d g johnson concluded that available empirical evidence did not support galbraith and black s high fixed cost hypothesis he argued instead that the data were consistent with inelastic supply of agricultural inputs johnson and pasour criticized inferring asset fixity from a divergence between acquisition costs and salvage values they argued that the appropriate concept for investigating resource allocation is that of the resource s opportunity cost although they criticized g l johnson s fixed asset theory they still concluded that asset fixity theory can contribute toward an understanding of why the supply function whether firm or industry is not reversible

a translog cost function analysis of u s agriculture 1939 77 over the past four decades major changes have occurred in u s agriculture a new era in agricultural production in the united states began in 1939 world war ii gave a boost to agriculture still bogged in the depression productivity increases over the period 1939 77 have been quite impressive measured crudely by the ratio of the indices of output and input the productivity index 1967 100 increased from 59 in 1939 to 119 in 1977 to study this phenomenon a multi input translog cost function incorporating hicks neutral technical change hntc was specified annual timeseries data for the united states was used to estimate the model neoclassical duality theory provides an approach for computing the pairwise elasticities of substitution between inputs for each year as well as the annual own and cross price elasticities of demand for inputs

is farming a constant cost industry measurement of cost size relationships for farming has long been an important area of research in agricultural economics much of this research has had a farm management and production economics orientation and firm industry interdependencies have often been ignored research results stemming from such an orientation should be interpreted with care when used for policy purposes pecuniary externalities may be of greater importance than indicated by research to this time a suggestion is made for treating induced technical change as comparable to a pecuniary externality questions are raised on both theoretical and empirical grounds whether farming in the united states should be considered a constant cost industry for policy purposes

net investment in farm tractors an econometric analysis a wide range of assumptions about the capital deterioration and marginal factor cost of tractors has been made in previous studies this study develops a measure of the implicit rental price of tractors which accounts for the capital structure used by farmers the capacity depreciation of tractors and income tax considerations estimates of net investment models for alternative capacity depreciation patterns are compared to those suggested by engineering considerations the results show that the frequently used geometric decay pattern does the poorest job of explaining annual real net investment in farm tractors

dynamic input demand an application to agriculture a theoretically consistent analytical framework for examining dynamic agricultural input demand is developed and applied results from duality theory on restricted variable profit functions are incorporated into a long run dynamic optimization framework input use is affected by external adjustment costs which permits sluggish factor adjustment

uniform and non uniform second best input taxes we investigate second best input based taxes foragricultural nonpoint pollution control when marketprices are endogenous and production isheterogeneous theoretically we derive the optimalforms of taxes which take account of heterogeneity non uniform taxes and a tax which does not auniform tax empirically we use a multi factor market equilibrium simulation model to determineoptimal tax rates and associated equity effects particularly differences in landowner gains lossesacross a heterogeneous region when market prices areendogenous second best tax policies result inpecuniary externalities that affect existingenvironmental externalities in particular thepecuniary externalities amplify the effect of producerheterogeneity on determination of sub regionaldifferences in tax rates and returns to land particularly for the uniform policy with endogenousprices the uniform tax rate is considerably higherthan any of the non uniform rates and ironically thenon uniform taxes result in less dispersion oflandowner gains across sub regions than the uniformtax

the london congestion charge by the 1990s the average speed of trips across london was below that at the beginning of the twentieth century before the car was introduced and by the end of that decade public concern over levels of traffic congestion was high in early 2003 london imposed a congestion charge a daily charge for driving or parking a vehicle on public roads within central london between the hours of 7 00 a m and 6 30 p m on workdays traffic congestion has declined substantially and the program is largely popular this article describes the origins of the london congestion charge how it overcame practical and theoretical difficulties and what effects it has had the introduction of the london congestion charge is in important respects a triumph of economics it represents a high profile public and political recognition of congestion as a distorting externality and of road pricing as an appropriate policy response

estimation of australian wool and lamb production technologies under uncertainty an error components approach a model of producer behavior which explicitly accounts for both output price and production uncertainty is formulated and estimated if the production technology is multiplicatively separable in its deterministic and stochastic components then the expected utility maximization problem implies cost minimization for planned or expected output consequently our empirical model of three lamb and wool producing sectors in australia involves the estimation of a system of input cost share and cost equations whose disturbances have an error components structure the empirical results are evaluated in terms of input demand elasticities and estimates of the stochastic components of production are presented

testing short run factor demand models in canadian and u s agriculture equilibrium factor demand models are being replaced by a variety of short run and dynamic models in empirical production research in this paper the authors provide evidence on the usefulness of short run production models in aggregate canadian and american agriculture from 1961 to 1982 they offer an alternative data based dynamic model which encompasses the short run model this permits them to test for the short run models and for two simple dynamic models in favor of their most general dynamic model

constrained output maximization and us agriculture this paper presents a framework for estimating an indirect production function and then applies it to aggregate us agriculture issues addressed include tests of standard hypotheses about the underlying technology homotheticity neutral technical change etc as well as examination of consistency in aggregation and the effects of changes in the level of aggregate expenditure on farm output since there already exist several studies empirically describing agricultural production technologies with indirect objective functions one might fairly ask whether this paper really breaks any new ground we feel that it does one reason is that existing studies e g binswanger 1974 lopez 1980 ball and chambers 1982 ray 1982 and weaver 1983 all rely on either profit or cost functions to date there appears to be only one study using an indirect production appelbaum 1979 and it is not in agriculture this seems unfortunate because there are many instances in agriculture for which an indirect productio

expenditure constraints and profit maximization in u s agriculture the u s agricultural sector is undergoing some of its most severe financial problems since the great depression numerous reports have emerged of large numbers of farmers being unable to obtain short term oper

productivity growth and incentive regulation in austria s gas distribution abstract the projected rate of productivity growth is the critical determinant of the price cap in incentive regulation however the regulatory authorities generally lack sophisticated industry tfp studies to set an optimal cap we thus estimate productivity growth in the austrian gas distribution sector in a translog cost function framework a key feature is our unique panel database on costs and outputs of regulated utilities for the period 2002 2013 covering six years prior and during incentive regulation as introduced in 2008 we find a modest tfp growth rate in the early sample years followed by a decline to zero or even slightly negative rates in recent years we also find a significant potential for returns to scale which is left unexploited indicating that utilities could significantly save on costs by merging as essential investments have already been undertaken in the past opportunities for technological progress seem to be limited in recent years

the output bias of technological change in postwar japanese agriculture in order to explain the rapid change in the output mix this study tests the hypothesis that technological change in postwar japanese agriculture was biased towards livestock production a multioutput translog cost function was estimated for the 1958 84 period in which results are consistent with the hypothesis furthermore changes in the composition of crop and livestock production had significant impacts on relative factor uses above all expanding livestock production required relatively less labor than expanding crop production implying a positive contribution to the rapid exodus of labor to the nonagricultural sectors

an opportunity cost view of fixed asset theory and the overproduction trap in fixed asset and exit barrier theories durable asset valuation is based upon acquisition prices yielding downwardly biased rate of return estimates and erroneous implications that excess resources become trapped in production when product price expectations fall conventional asset valuation based on opportunity cost shows that excess resource applications are incompatible with rational producer behavior market failure conclusions of overproduction trap models are shown to be unfounded a review of recently published agricultural economics texts illustrates how use of fixed asset theory in the college classroom obscures the concept of choice influencing cost and the rule of resource allocative efficiency

effect of u s immigration reform on labor intensive agricultural commodities a major concern in development of the 1986 immigration reform and control act was the potential for reductions in seasonal farm labor supply although the act appears to have increased farm labor supply future immigration policy will likely be affected by similar concerns muth s model of industry supply and factor demand is adapted to analyze effects of labor supply reductions on selected u s crops labor factor share and output demand elasticity are the most important factors influencing the impact of labor supply on production and effects of moderate supply decreases will be small if recent output demand conditions continue

the relative demand for inputs a decomposition analysis of us agriculatural production 1988 the relative demand for inputs a decomposition analysis of us agriculatural production applied economics vol 20 no 5 pp 665 678