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Nonrobustness Of Dynamic Dual Models Of The U.S. Dairy Industry

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  • Howard, Wayne H.
  • Shumway, C. Richard

Abstract

The robustness of dynamic dual model results across functional forms is examined for the U.S. dairy industry. Modified generalized Leontief (GL) and normalized quadratic (NQ) functional forms are compared by examining their consistency with properties of the competitive firm, estimated rates of adjustment for cows and labor, tests of technological change, and elasticities. Homogeneity and symmetry are maintained in both models. Convexity is not rejected by the GL and is not seriously violated by the NQ. Absence of technological change is rejected by both models, but quality indexes on labor and cows fully embody technological change occurring within labor and cows in the NQ but not in the GL. Policy-relevant elasticities differ greatly between the functional forms. Dynamic dual models are found to be non-robust in important ways to choice of function form.

Suggested Citation

  • Howard, Wayne H. & Shumway, C. Richard, 1989. "Nonrobustness Of Dynamic Dual Models Of The U.S. Dairy Industry," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 18(1), pages 1-8, April.
    • Handle: RePEc:ags:nejare:28808
    DOI: 10.22004/ag.econ.28808
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    References listed on IDEAS

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    Cited by:

    1. Fousekis, Panos & Revell, Brian J., 2000. "Meat Demand in the UK: A Differential Approach," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 32(1), pages 11-19, April.
    2. Krasachat, W. & Coelli, T. J., 1995. "Dynamics of Agricultural Production on Thailand," 1995 Conference (39th), February 14-16, 1995, Perth, Australia 170898, Australian Agricultural and Resource Economics Society.
    3. Richards, Timothy J. & Patterson, Paul M., 1998. "Dynamic Complementarity In Export Promotion: The Market Access Program In Fruits And Vegetables," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(2), pages 1-19, December.
    4. Ker, Alan & Howard, Wayne H., 1993. "Economies of Size in the Ontario Swine Industry," Department of Agricultural Economics and Business 258725, University of Guelph.
    5. C. Richard Shumway, 1993. "Production economics: Worthwhile investment?," Agricultural Economics, International Association of Agricultural Economists, vol. 9(2), pages 89-108, August.
    6. Weersink, Alfons, 1990. "Nonrobustness Of Dynamic Dual Models Of The Northeastern And U.S. Dairy Industries," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 19(1), pages 1-5, April.
    7. Livanis, Grigorios & Moss, Charles B., 2006. "Quasi-fixity and multiproduct firms," Economics Letters, Elsevier, vol. 93(2), pages 228-234, November.

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    Livestock Production/Industries;

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