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PRODUCTION FUNCTION ANALYSIS AS A GUIDE TO POLICY IN LOW‐INCOME FARM AREAS
Author(s) -
SCHMITZ A.
Publication year - 1967
Publication title -
canadian journal of agricultural economics/revue canadienne d'agroeconomie
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 37
eISSN - 1744-7976
pISSN - 0008-3976
DOI - 10.1111/j.1744-7976.1967.tb02399.x
Subject(s) - arbitrariness , production (economics) , function (biology) , production theory , economics , production function , estimation , econometric model , selection (genetic algorithm) , econometrics , public economics , microeconomics , computer science , philosophy , linguistics , management , evolutionary biology , artificial intelligence , biology
This paper discusses many of the problems encountered in estimating production functions in a low‐income farm area in Saskatchewan. It also ermines the difficulties of interpreting the estimated structural coefficients and their usefulness in policy formulation. The econometric difficulties discussed in production function estimation are those of function selection and choice and rearmament of variables. Many of the comments are also relevant to other forms of quantitative research. It is combed that: a great deal of arbitrariness is involved in selecting the appropriate production function model, statistical results often conflict with economic theory, it is impossible to interpret the results in a meaningful manner, and production function research is unable to. provide fruitful information for the type of policy decisions deemed desirable to change the economic structure of low‐income farm areas.