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Decomposition Analysis of Factor Cost Shares: The Case of Greek Agriculture

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  • Karagiannis, Giannis
  • Katranidis, Stelios
  • Velentzas, Kostas

Abstract

An alternative version of decomposition analysis, based on factor cost shares rather than input demand functions, is presented and applied to Greek agriculture. Decomposition analysis shows that most of the changes in factor cost shares during the period from 1973 to 1989 are attributed to technical change and factor substitution, while the role of the scale effect is small, except that of fertilizer. The decomposition analysis results are then used to analyze the implications of Greece's fertilizer and feed subsidy removal, which took place in 1990.

Suggested Citation

  • Karagiannis, Giannis & Katranidis, Stelios & Velentzas, Kostas, 1996. "Decomposition Analysis of Factor Cost Shares: The Case of Greek Agriculture," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 28(2), pages 369-379, December.
    • Handle: RePEc:cup:jagaec:v:28:y:1996:i:02:p:369-379_00
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    1. Friedrich Schneider & Klaus Salhofer & Erwin Schmid & Gerhard Streicher, 2001. "Was the Austrian agricultural policy least cost efficient?," Economics working papers 2001-03, Department of Economics, Johannes Kepler University Linz, Austria.
    2. George Mergos & Giannis Karagiannis, 1997. "Sources Of Productivity Change Under Temporary Equilibrium And Application To Greek Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1‐3), pages 313-329, January.
    3. Yumei Liu & Wuyang Hu & Simon Jetté-Nantel & Zhihong Tian, 2014. "The Influence of Labor Price Change on Agricultural Machinery Usage in Chinese Agriculture," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(2), pages 219-243, June.

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