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Research Bias Effects for Input and Output Decisions: An Application to U.S. Cash Grain Farms

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  • Huffman, Wallace E.

Abstract

Duality theory and static multi-product technology have been applied to analyze aggregate agricultural data by Shumway; Weaver; and McKay, Lawrence and Vlastuin. Several studies (e.g., Antle; Binswanger; and Lopez, 1985a) have indexed technology with a time trend, but no study has attempted to investigate the effects of agricultural research, extension, and education in the multiple-output dual static framework. The objectives of this paper are (i) to assess the bias effects in cash-grain farmers' production decisions caused by public agricultural research, public extension, and farmers' schooling and (ii) to present new estimates of the shadow values of agricultural research, extension, and schooling obtained from the static dual model of agricultural production. The model is fitted to data for 42 states, pooled over Agricultural Census years 1949-74, containing the cash-grain farm type. The organization is as follows: The econometric model of production is first presented. Second, the empirical analyses, which contain a discussion of the data and empirical results, are presented. Conclusions and implications are in the final section.

Suggested Citation

  • Huffman, Wallace E., 1987. "Research Bias Effects for Input and Output Decisions: An Application to U.S. Cash Grain Farms," ISU General Staff Papers 198701010800001039, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:198701010800001039
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    1. Binswanger, Hans P, 1974. "The Measurement of Technical Change Biases with Many Factors of Production," American Economic Review, American Economic Association, vol. 64(6), pages 964-976, December.
    2. Lau, Lawrence J., 1976. "A characterization of the normalized restricted profit function," Journal of Economic Theory, Elsevier, vol. 12(1), pages 131-163, February.
    3. Diewert, W. E., 1973. "Functional forms for profit and transformation functions," Journal of Economic Theory, Elsevier, vol. 6(3), pages 284-316, June.
    4. Wallace E. Huffman, 1977. "Allocative Efficiency: The Role of Human Capital," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(1), pages 59-79.
    5. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    6. Bruce L. Gardner, 1976. "Futures Prices in Supply Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 58(1), pages 81-84.
    7. Lopez, Ramon E, 1985. "Structural Implications of a Class of Flexible Functional Forms for Profit Functions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(3), pages 593-601, October.
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    1. Khatri, Yougesh & Thirtle, Colin & Van Zyl, Johan, 1995. "South African Agricultural Competitiveness: A Profit Function Approach to the Effects of Policies and Technology," 1994 Conference, August 22-29, 1994, Harare, Zimbabwe 183442, International Association of Agricultural Economists.
    2. Schimmelpfennig, David & Thirtle, Colin & van Zyl, Johan & Arnade, Carlos & Khatri, Yougesh, 2000. "Short and long-run returns to agricultural R&D in South Africa, or will the real rate of return please stand up?," Agricultural Economics, Blackwell, vol. 23(1), pages 1-15, June.
    3. Farrington, John & Thirtle, Colin & Henderson, Simon, 1997. "Methodologies for monitoring and evaluating agricultural and natural resources research," Agricultural Systems, Elsevier, vol. 55(2), pages 273-300, October.
    4. Yougesh Khatri & Colin Thirtle, 1996. "Supply And Demand Functions For Uk Agriculture: Biases Of Technical Change And The Returns To Public R&D," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1‐4), pages 338-354, January.
    5. Khatri, Y. & Schimmelpfennig, D. & Thirtle, C. & van Zyl, J., 1996. "Refining Returns To Research And Development In South African Commercial Agriculture," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 35(4), December.

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