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The Responsiveness of U.S. Rice Acreage to Price and Production Costs

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  • Salassi, Michael E.

Abstract

Ordinary least squares and seemingly unrelated regression procedures were used to analyze the impacts of changes in rice prices and production costs on U.S. rice planted acreage. National and regional response models were estimated over the 1970-92 period. Supply-inducing prices of rice were estimated as a function of effective rice support prices and seasonal average market prices. Expected production costs per acre were estimated using lagged actual total variable cash production expenses per acre adjusted by the previous 3-year average annual change in variable expenses. Estimated short-run price and production cost elasticities were found to be inelastic at the national level. However, the magnitude of the production cost elasticities were found to be greater than the price elasticities. Estimated long-run elasticities at the U.S. level were inelastic for changes in price but elastic for changes in production costs. Although acreage response varied across regions, similar relationships were found between price and production cost elasticities.

Suggested Citation

  • Salassi, Michael E., 1995. "The Responsiveness of U.S. Rice Acreage to Price and Production Costs," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 27(2), pages 386-399, December.
  • Handle: RePEc:cup:jagaec:v:27:y:1995:i:02:p:386-399_02
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    Cited by:

    1. Becker, Anthony D. & Judge, Rebecca P., 2012. "Measuring the Effects of Decoupled Payments on Indica Rice Production Under the 1996 and 2002 Farm Bills," Working Papers 120073, St. Olaf College, Department of Economic.
    2. Anthony D. Becker & Rebecca P. Judge, 2012. "Measuring the Effects of Decoupled Payments on Indica Rice Production Under the 1996 and 2002 Farm Bills," Working Papers 201201, St. Olaf College, Department of Economics.
    3. Anthony Becker & Rebecca Judge, 2014. "Evidence of Distortionary Effects of Decoupled Payments in U.S. Indica Rice Production," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 42(3), pages 265-275, September.
    4. Ashfaq, Muhammad & Parton, Kevin A. & Griffith, Garry R. & Piggott, Roley R., 1999. "A Multilevel Economic Analysis of the Wheat Market in Pakistan," 1999 Conference (43th), January 20-22, 1999, Christchurch, New Zealand 123757, Australian Agricultural and Resource Economics Society.
    5. Tey, (John) Yeong-Sheng & Darham, Suryani & Mohd Noh, Aswani Farhana & Idris, Nurjihan, 2009. "Acreage response of rice: A case study in Malaysia," MPRA Paper 15300, University Library of Munich, Germany.
    6. (John) Yeong-Sheng TEY & Suryani DARHAM & Aswani Farhana MOHD NOH & Nurjihan IDRIS, 2010. "Acreage response of paddy in Malaysia," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 56(3), pages 135-140.

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