By Bruce L. Gardner and Gordon C. Rausser (Eds.)
This primary quantity of the ''Handbook of Agricultural Economics'' provides paintings on issues important to the economics of agriculture: the quantitative illustration of know-how; industry expectancies; family creation behaviour; client behaviour with doubtful caliber and security of products; and problems with imperfect festival in nutrition advertising. quantity 1A treats concerns in agricultural creation, representing the results of many years of labor deepening and widening the unique concentration of agricultural economics on farm administration. as well as the speculation and estimation of construction and provide behaviour in agriculture, chapters are dedicated to issues on which significant developments were made: technological switch; returns to agricultural examine; the commercial constitution of agriculture, land associations and markets; and human capital and finance. chapters are additional really expert to rural labour and loved ones matters: migration and the position of girls in constructing nations
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A somewhat similar problem had been encountered much earlier in the theory of consumer choice, which sought a presentation without having to resort to the unobservable utility (objective) function. In the case of consumer choice, the empirical inference is based on the observed budget constraint, quantities, and prices. In the case of production, we observe the values of the profit (objective) function but do not observe the technology constraint, and the problem is to infer about it from the data.
Are the underlying assumptions of duality met? • What are the statistical benefits of this approach? • Where do we go from here? The dual estimates are obtained by regressing factor shares on prices, time trend, and sometimes output. When the change in the use of inputs is decomposed to price, trend (a proxy for technology), and output effects, it is found that trend and output capture most of the changes, whereas the role of prices is the least important. Thus the contribution of prices to the explanation of inputs or output variations is rather limited.
The factor demand is derived from the cost function, and therefore it is affected by shocks affecting the cost function. These shocks are thereby translated to the factor prices. In short, factor prices need not be exogenous. This limitation applies to all studies that use market data - rather than firm data - including studies based on profit functions. This is not a trivial point because agriculture cannot be assumed to be a price-taker in the rural labor and capital markets, and definitely not in the land market.
Agricultural Production by Bruce L. Gardner and Gordon C. Rausser (Eds.)
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