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Factor Demand and Returns to Scale in Milk Production: Effects of Price, Substitution and Technology

Published online by Cambridge University Press:  10 May 2017

Anwarul Hoque  and
Adesoji Adelaja
Anwarul Hoque
Affiliation:
Department of Agricultural Economics, West Virginia University
Adesoji Adelaja
Affiliation:
Department of Agricultural Economics, West Virginia University
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Abstract

A translog cost function was estimated using pooled time series-cross section data from five Northeastern States to study structural changes in the dairy industry. The approach given in the duality theory was found useful in estimating the input demand structure under changing input prices and technology conditions. The estimated Allen partial elasticities of substitution show the existence of substitution between energy and non-energy inputs in dairy farming. Despite input price increases the dairy industry maintained competitiveness as seen by the returns to scale parameters.

Type
Articles
Information
Northeastern Journal of Agricultural and Resource Economics , Volume 13 , Issue 2 , October 1984 , pp. 238 - 244
Copyright
Copyright © 1984 Northeastern Agricultural and Resource Economics Association 

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Footnotes

Research assistance was provided by Fernando Caceres and M. A. Baset. The authors gratefully acknowledge the helpful comments of the Journal reviewers.

Published with the approval of the Director of the West Virginia University of Vermont which operates through farmers’ voluntary tific Article No. 1867. This research was supported with funds appropriated under the Hatch Act.

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