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A Translog Cost Function Analysis of U.S. Agriculture, 1939-77
Subhash C. Ray
American Journal of Agricultural Economics
Vol. 64, No. 3 (Aug., 1982), pp. 490-498
Stable URL: http://www.jstor.org/stable/1240641
Page Count: 9
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The translog cost function provides a convenient framework for analyzing U.S. agricultural production in a multioutput context. Treating crops and livestock as two distinct outputs, this study utilizes standard results of neoclassical duality theory to obtain measures of pairwise elasticities of substitution between inputs, price elasticities of factor demands, and the rate of Hicks-neutral technical change. Results obtained from joint GLS estimation of parameters of cost and share equations indicate a declining trend in the degree of substitutability between capital and labor. Price elasticity of demand for all inputs increased over time. The measured rate of technical change was 1.8% per year.
American Journal of Agricultural Economics © 1982 Agricultural & Applied Economics Association