Decomposition Analysis of Derived Demand for Factor Inputs: The Case of Rice Production in Japan

Toshiyuki Kako

American Journal of Agricultural Economics, 1978, vol. 60, issue 4, 628-635

Abstract: The process of the growth of rice production in Japan is analyzed by decomposition analysis of factor input demand. The variation in factor input demand is broken down into three components: output level, factor substitution along an isoquant, and technical change. The analysis is carried out using the estimates of Allen partial elasticities of substitution calculated from the fitted transcendental logarithmic cost function. The decline in labor input level is found to be due mainly to technical change, and the labor-saving effect of the factor substitution along an isoquant is relatively small.

Date: 1978
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:60:y:1978:i:4:p:628-635.

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