Dynamic Adjustment of U.S. Agriculture to Energy Price Changes

David Lambert and Jian Gong

Journal of Agricultural and Applied Economics, 2010, vol. 42, issue 2, 13

Abstract: Energy prices increased significantly following the first energy price shock of 1973. Agricultural producers found few short run substitution possibilities as relative factor prices changed. Inelastic demands resulted in total expenditures on energy inputs that have closely followed energy price changes over time. A dynamic cost function model is estimated to derive short and long run adjustments within U.S. agriculture between 1948 and 2002 to changes in relative input prices. The objective is to measure the degree of farm responsiveness to energy price changes and if this responsiveness has changed over time. Findings support inelastic demands for all farm inputs. Statistical results support moderate increases in responses to energy and other input price changes in the 1980s. However, demands for all inputs remain inelastic in both the short and long run. Estimation of share equations associated with a dynamic cost function indicates that factor adjustment to input price changes are essentially complete within 1 year.

Keywords: Agricultural and Food Policy; Demand and Price Analysis; International Development; Production Economics; Productivity Analysis (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://ageconsearch.umn.edu/record/90666/files/jaae182.pdf (application/pdf)

Related works:
Journal Article: Dynamic Adjustment of U.S. Agriculture to Energy Price Changes (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:joaaec:90666

DOI: 10.22004/ag.econ.90666

Access Statistics for this article

More articles in Journal of Agricultural and Applied Economics from Southern Agricultural Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().