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Supply Response in the U.S. Sheep Industry
Author(s) -
Whipple Glen D.,
Menkhaus Dale J.
Publication year - 1989
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 - 10.2307/1241781
Subject(s) - wool , short run , economics , flock , econometrics , elasticity (physics) , microeconomics , geography , biology , paleontology , materials science , archaeology , composite material
A dynamic supply model of the U.S. sheep industry is constructed. The model incorporates restrictions on fixed capital and the demographic characteristics of the breeding flock. The model is estimated using least squares techniques and simulated to generate a matrix of short‐ and intermediate‐run elasticity estimates. The estimates indicate that sheep supply is positively related to lamb price in the short run and the intermediate run (ten plus years), although inelastic in the short run. The supply response to wool price also is positive and quite elastic in the intermediate term. These results imply that both lamb and wool prices are important to the maintenance of the U.S. sheep industry.