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Allocation Efficiency in a Traditional Indian Agriculture

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  • W. David Hopper

Abstract

The hypothesis that Indian cultivators who use traditional technology make rational profit maximizing allocations of factors was tested by observation of the allocation of four major inputs to four production alternatives for 43 farms in north central India. The measurements were made during the peak period of agricultural activity when factor-product allocations are truly competitive. Production functions were determined and the implicit marginal product of each factor and the implicit value of each product were calculated at the mean levels of input and expected output. The calculated relative prices implicit in the factor-product allocations conformed, within error limits, to expectations of profit maximizing behavior derived from a static neoclassical model. When the calculated relative implicit product prices were expanded to the market price level, they were in close correspondence with prices prevailing in the local market town.

Suggested Citation

  • W. David Hopper, 1965. "Allocation Efficiency in a Traditional Indian Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 47(3), pages 611-624.
    • Handle: RePEc:oup:ajagec:v:47:y:1965:i:3:p:611-624.
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    1. Gallagher, Marcos & Goetz, Stephan J. & Debertin, David L., 1997. "Efficiency Effects of Institutional Factors: Limited-Resource Farms in Northeast Argentina," 1997 Occasional Paper Series No. 7 198047, International Association of Agricultural Economists.
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    17. Annemie Maertens & Hope Michelson & Vesall Nourani, 2021. "How Do Farmers Learn from Extension Services? Evidence from Malawi," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(2), pages 569-595, March.
    18. Mellor, John W., 1969. "Production Economics And The Modernization Of Traditional Agricultures," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 13(1), pages 1-10, June.
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    21. Kanter, Christopher A. & Hueth, Brent & Gould, Brian W., 2013. "A Comparative Efficiency Analysis of Cooperative and Non-cooperative Dairy Manufacturing Firms," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150497, Agricultural and Applied Economics Association.
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