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Price-Conditional Technology

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  • Fulginiti, Lilyan E.

Abstract

Economics theorists for years have considered the possibility that the direction of technical change is altered by changes in relative prices. Prices also have been identified as one of the determinants of technical change through innovation. This article extends the theory of the firm to cover situations in which the firms' technology set is conditional on expected prices. The basic idea is to distinguish between "market prices," or the prices that guide the firm's choices subject to the technology that is in place, and "normal prices," the prices conditioning the choice of technology. A "generalized" price effect is obtained that included the traditional price effect as well as the technical change effect of price changes, and an example is presented.

Suggested Citation

  • Fulginiti, Lilyan E., 1994. "Price-Conditional Technology," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(01), pages 1-12, July.
    • Handle: RePEc:ags:jlaare:31222
    DOI: 10.22004/ag.econ.31222
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    References listed on IDEAS

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    1. Fulginiti, Lilyan E & Perrin, Richard K, 1993. "Prices and Productivity in Agriculture," The Review of Economics and Statistics, MIT Press, vol. 75(3), pages 471-482, August.
    2. Basmann, R. L. & Hayes, K. J. & Slottje, D. J. & Molina, D. J., 1987. "A new method for measuring technological change," Economics Letters, Elsevier, vol. 25(4), pages 329-333.
    3. Basmann, R L & Molina, D J & Slottje, D J, 1983. "Budget Constraint Prices as Preference Changing Parameters of Generalized Fechner-Thurstone Direct Utility Functions," American Economic Review, American Economic Association, vol. 73(3), pages 411-413, June.
    4. Chris Fawson & C. Richard Shumway & Robert L. Basmann, 1990. "Agricultural Production Technologies with Systematic and Stochastic Technical Change," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(1), pages 182-199.
    5. R. E. Lucas, 1967. "Tests of a Capital-Theoretic Model of Technological Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 34(2), pages 175-189.
    6. Peterson, Willis L., 1987. "International Land Quality Indexes," Staff Papers 13877, University of Minnesota, Department of Applied Economics.
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    Cited by:

    1. Esposti, Roberto & Pierani, Pierpaolo, 2008. "Price-induced technical progress in Italian agriculture," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 89(4).
    2. Paris, Quirino & Caputo, Michael R., 1995. "The Rhetoric Of Duality," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(01), pages 1-20, July.
    3. Lilyan E. Fulginiti & Richard K. Perrin, 1999. "Have Price Policies Damaged Ldc Agricultural Productivity?," Contemporary Economic Policy, Western Economic Association International, vol. 17(4), pages 469-475, October.
    4. Riaz, Khalid, 1994. "Food consumption patterns in rural Pakistan," ISU General Staff Papers 1994010108000011501, Iowa State University, Department of Economics.
    5. Ludo Peeters & Yves Surry, 2000. "Incorporating Price-Induced Innovation in a Symmetric Generalised McFadden Cost Function with Several Outputs," Journal of Productivity Analysis, Springer, vol. 14(1), pages 53-70, July.

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