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Product Complementarity in Production: The By-product Case

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  • Beattie, Bruce
  • Thompson, Stassen
  • Boehlje, Michael

Abstract

The product-product relationship has been a traditional subject of most production economics and farm management courses for the past two decades. Although the traditional examples of product-product optimization have come primarily from the agricultural production sector (e.g., legume-corn rotations and crop-livestock combinations), the concept is useful in analyzing the organization of any multi-product firm-including those firms which produce externalities in the form of environmental degradation.Three concepts or ideas usually are offered as giving rise to a positively sloped or complementary range on the product transformation surface-(l) one production process uses as an input a by-product of another production process, (2) one process uses quantities of a factor that are “surplus” to another, or (3) technical interaction (production function shifts) occurs.

Suggested Citation

  • Beattie, Bruce & Thompson, Stassen & Boehlje, Michael, 1974. "Product Complementarity in Production: The By-product Case," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 6(2), pages 161-165, December.
    • Handle: RePEc:cup:jagaec:v:6:y:1974:i:02:p:161-165_01
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    Cited by:

    1. Swinton, Scott M. & Zhang, Wei, 2005. "Rethinking Ecosystem Services from an Intermediate Product Perspective," 2005 Annual meeting, July 24-27, Providence, RI 19536, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Dakpo, K Hervé, 2016. "On modeling pollution-generating technologies: a new formulation of the by-production approach," Working Papers 245191, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    3. K Hervé Dakpo, 2016. "On modeling pollution-generating technologies: a new formulation of the by-production approach," Working Papers SMART 16-06, INRAE UMR SMART.
    4. Wossink, Ada & Swinton, Scott M., 2007. "Jointness in production and farmers' willingness to supply non-marketed ecosystem services," Ecological Economics, Elsevier, vol. 64(2), pages 297-304, December.

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