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Estimation of Factor Demand and Substitution in the Australian Pig Industry: A Dual Approach

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  • Buetre, Benjamin L.
  • Ahmadi-Esfahani, Fredoun Z.

Abstract

This study seeks to estimate the rate by which inputs in Australian pig production are substituted for one another when prices change. It employs a dual approach to response analysis. Using cost shares of inputs and input price indexes for the period 1977-78 to 1990-91, a set of equations derived from a transcendental logarithmic function is estimated with symmetry and homogeneity constraints imposed. The results indicate that, with the exception of the demand for feed which is a vital production input, pig producers are very responsive to own price changes. The estimated elasticities generally differ in magnitude from similar studies of the Australian agricultural sector, and suggest that, at a lower level of aggregation, farmers are more flexible in changing input mix.

Suggested Citation

  • Buetre, Benjamin L. & Ahmadi-Esfahani, Fredoun Z., 1993. "Estimation of Factor Demand and Substitution in the Australian Pig Industry: A Dual Approach," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 61(02-1), pages 1-12, August.
    • Handle: RePEc:ags:remaae:9598
    DOI: 10.22004/ag.econ.9598
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    References listed on IDEAS

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    Cited by:

    1. Shumway, C. Richard, 1995. "Recent Duality Contributions In Production Economics," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(1), pages 1-17, July.

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