Estimating Production Response of Broadacre Farms in Western Australia: The Nexus of Empirics and Economics Revisited

Vilaphonh Xayavong, Nazrul Islam and Ruhul Salim
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Vilaphonh Xayavong: Department of Agriculture and Food, Western Australia, 3 Baron-Hay Court, South Perth, WA 6151, Australia

Economic Analysis and Policy, 2011, vol. 41, issue 3, 217-232

Abstract: Reliable estimates of elasticities are fundamental requirement to accurate economic forecasting and valid analyses of the impacts of changes in government policies or international events. The aim of this paper is thus, to estimate production response for broadacre farms in Western Australia by using a normalized quadratic profit function for the period 1977/78 to 2005/06. The result reflects the imposition of curvature restrictions for a normalized profit function, and estimated elasticities are found to be less elastic in the short run. The results from this exercise can be used in a number of ways, depending on the policy objective in mind, such as simulation for forecasting agricultural production.

Keywords: Production Response; Duality Production Theory; Nonlinear Inequality Constraints, Flexible Functional Forms. (search for similar items in EconPapers)
Date: 2011
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Working Paper: ESTIMATING PRODUCTION RESPONSE OF BROADACRE FARMS IN WESTERN AUSTRALIA: THE NEXUS OF EMPIRICS AND ECONOMICS REVISITED (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:41:y:2011:i:3:p:217-232

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