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Price-Induced Technological Change in Italian Agriculture: An SGM Restricted Cost Function Approach (1951-91)

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  • Esposti, Roberto
  • Pierani, Pierpaolo

Abstract

This paper aims at investigating the price-induced innovation hypothesis in Italian agriculture over the years 1951 to 1991. Price-inducement hypothesis is analysed and tested within the framework proposed by Peeters and Surry (2000). The major difference is the short-run specification of the dual technology. Distinguishing between variable and quasi-fixed inputs allows both a more realistic representation of how relative prices may affect innovation and input use over time and a detailed decomposition of the relevant biases in input use. Results provide evidence in favour of price-inducement innovation in Italian agriculture.

Suggested Citation

  • Esposti, Roberto & Pierani, Pierpaolo, 2005. "Price-Induced Technological Change in Italian Agriculture: An SGM Restricted Cost Function Approach (1951-91)," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24662, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae05:24662
    DOI: 10.22004/ag.econ.24662
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    References listed on IDEAS

    as
    1. Esposti, Roberto & Pierani, Pierpaolo, 2000. "Modelling technical change in Italian agriculture: a latent variable approach," Agricultural Economics, Blackwell, vol. 22(3), pages 261-270, April.
    2. Clark, J. Stephen & Klein, Kurt K. & Kerr, William A., 2003. "Fundamental And Induced Biases In Technological Change In Central Canadian Agriculture," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25874, International Association of Agricultural Economists.
    3. Roberto ESPOSTI & Pierpaolo PIERANI, 2001. "Building the Knowledge Stock: Lags, Depreciation and Uncertainty in Agricultural R&D," Working Papers 145, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    4. C. Thirtle & R. Townsend & J. van Zyl, 1998. "Testing the induced innovation hypothesis: an error correction model of South African agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 19(1-2), pages 145-157, September.
    5. R Esposti, 2000. "The impact of public R&D and extension expenditure on Italian agriculture: an application of a mixed parametric-nonparametric approach," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 27(3), pages 365-384, September.
    6. Ludo Peeters & Yves Surry, 2000. "Incorporating Price-Induced Innovation in a Symmetric Generalised McFadden Cost Function with Several Outputs," Journal of Productivity Analysis, Springer, vol. 14(1), pages 53-70, July.
    7. Colin G. Thirtle & David E. Schimmelpfennig & Robert E Townsend, 2002. "Induced Innovation in United States Agriculture, 1880–1990: Time Series Tests and an Error Correction Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 598-614.
    8. Roberto Esposti, 2003. "Public R&D investment and cost structure in Italian agriculture, 1960--1995," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 30(4), pages 509-537, December.
    9. Michael Caputo & Quirino Paris, 2005. "An Atemporal Microeconomic Theory and an Empirical Test of Price-Induced Technical Progress," Journal of Productivity Analysis, Springer, vol. 24(3), pages 259-281, November.
    10. Pinar Celikkol & Spiro Stefanou, 1999. "Measuring the Impact of Price-Induced Innovation on Technological Progress: Application to the U.S. Food Processing and Distribution Sector," Journal of Productivity Analysis, Springer, vol. 12(2), pages 135-151, September.
    11. Thirtle, C. & Townsend, R. & van Zyl, J., 1998. "Testing the induced innovation hypothesis: an error correction model of South African agriculture," Agricultural Economics, Blackwell, vol. 19(1-2), pages 145-157, September.
    12. Pierani, Pierpaolo & Rizzi, Pier Luigi, 2003. "Technology and efficiency in a panel of Italian dairy farms: an SGM restricted cost function approach," Agricultural Economics, Blackwell, vol. 29(2), pages 195-209, October.
    13. Esposti, Roberto, 2002. "Public agricultural R&D design and technological spill-ins: A dynamic model," Research Policy, Elsevier, vol. 31(5), pages 693-717, July.
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