EconPapers    
Economics at your fingertips  
 

Joint production, land allocation, and the effects of the production flexibility program

Ekaterina Vorotnikova, Serhat Asci and James Seale ()
Additional contact information
Serhat Asci: California State University at Fresno

Empirical Economics, 2018, vol. 55, issue 3, 1121-1143

Abstract: Abstract An empirical land allocation model is developed and fit to production data of the top five crops in the USA and to crop output prices adjusted for direct payments and subsidies. The land allocation model based on the theory of the multiproduct firm allows for jointness in production, and it is extended to handle non-allocable inputs. Specifically, the model is used to analyze whether the Food Security Act of 1985, known as the 1985 Farm Bill, increased flexibility in land allocation decisions by comparing responsiveness of land allocation among the crops, before and after the passage of the 1885 Farm Bill, to changes in total land availability and changes in crop output prices. The results confirm that a structural change in land allocation dynamics took place after the passage of the 1985 Farm Bill. We show that more crops (wheat and soybeans, in particular) become more acreage responsive to the changes in total land available for production after 1985. For example, the results indicate that competition for acreage between corn and wheat is associated with the implementation of the 1985 Farm Bill. The results provide evidence that the onset of the increased acreage allocation flexibility by farmers originated in the policies of the 1985 Farm Bill. The study also demonstrates that a policy targeting a particular crop will inadvertently affect production of other crops. This study quantifies these indirect effects on the five major crops grown in the USA.

Keywords: Land allocation; Input allocation model; Multiproduct firm; Joint production; D24; L11; Q15 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s00181-017-1316-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
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:spr:empeco:v:55:y:2018:i:3:d:10.1007_s00181-017-1316-4

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-11-06
Handle: RePEc:spr:empeco:v:55:y:2018:i:3:d:10.1007_s00181-017-1316-4