Agricultural Production and Technical Change Around the World, 1961-2010

This paper extends the induced innovation research of Hayami and Ruttan by including 129 more countries, extending the time frame to 50 years and explaining the production process for those countries using a Cobb-Douglas function. From this data, the paper illustrates trade-offs between five inputs in agricultural production in empirical isoquants, and measures the progress of agricultural productivity by the magnitude of the shift in isoquants toward the origin. We can further test the implications of technical change on the productivity of the inputs: labor, land, fertilizer, and capital. We illustrate the response of input demands to rising agricultural wages and estimate scale and substitution effects using the fundamental law of derived demand. Lastly, we explore possible explanations for variation in agricultural productivity increases across countries by examining the relationship between countries’ trade protection policies and democracy level and unit labor costs.