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Real Capital Input in OECD Agriculture: A Multinational Comparison

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  • Ball, V. Eldon
  • Butault, Jean-Pierre
  • Nehring, Richard

Abstract

This paper provides a farm sector comparison of relative levels of capital input for seventeen OECD countries for the period 1973-2011. The starting point for construction of a measure of capital input is the measurement of capital stock. Estimates of depreciable capital are derived by representing capital stock at each point of time as a weighted sum of past investments. The weights correspond to the relative efficiencies of capital goods of different ages, so that the weighted components of capital stock have the same efficiency. The capital stocks of land are measured as implicit quantities derived from balance sheet data. We convert estimates of capital stock into estimates of capital service flows by means of capital rental prices. Implicit rental prices for each asset are based on the correspondence between the purchase price of the asset and the discounted value of future service flows derived from that asset. Finally, comparisons of levels of capital input among countries require data on relative prices of capital input. We obtain relative price levels for capital input via relative investment goods prices, taking into account the flow of capital input per unit of capital stock in each country.

Suggested Citation

  • Ball, V. Eldon & Butault, Jean-Pierre & Nehring, Richard, 2015. "Real Capital Input in OECD Agriculture: A Multinational Comparison," UC3M Working papers. Economics we1501, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:we1501
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    1. Eldon Ball & David Schimmelpfennig & Sun Ling Wang, 2013. "Is U.S. Agricultural Productivity Growth Slowing?," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 35(3), pages 435-450.
    2. John B. Penson & Dean W. Hughes & Glenn L. Nelson, 1977. "Measurement of Capacity Depreciation Based on Engineering Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 59(2), pages 321-329.
    3. Robert F. J. Romain & John B. Penson jr. & Rémy E. Lambert, 1987. "Capacity Depreciation, Implicit Rental Price, and Investment Demand for Farm Tractors in Canada," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 35(2), pages 373-385, July.
    4. Yue Jin Shi & Timothy T. Phipps & Dale Colyer, 1997. "Agricultural Land Values under Urbanizing Influences," Land Economics, University of Wisconsin Press, vol. 73(1), pages 90-100.
    5. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "Multilateral Comparisons of Output, Input, and Productivity Using Superlative Index Numbers," Economic Journal, Royal Economic Society, vol. 92(365), pages 73-86, March.
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