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The Estimation of Product Supply and Input Demand by the Differential Approach
Author(s) -
Rossi Nicola
Publication year - 1984
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1240804
Subject(s) - differential (mechanical device) , order (exchange) , estimation , product (mathematics) , economics , production (economics) , final demand , supply and demand , microeconomics , econometrics , derived demand , agriculture , demand side , industrial organization , demand curve , mathematics , ecology , geometry , management , finance , engineering , biology , aerospace engineering
This paper makes use of the differential approach to the theory of the multiproduct firm in order to empirically analyze input demand and product supply in Italian agriculture. Estimation of the parameters of the model with annual (1961–80) data for a sector model of fourteen products and three factors of production suggests possibilities for farmers to change their output mix in response to changes in the expected prices of products. On the input demand side, the derived demand functions seem to satisfy the integrability conditions but turn out to be quite inelastic.