Premium
Dynamic Input Decisions in Econometric Production Models
Author(s) -
Antle John M.,
Hatchett Stephen A.
Publication year - 1986
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 - 10.2307/1242140
Subject(s) - econometric model , productivity , production (economics) , econometrics , estimation , identification (biology) , economics , microeconomics , macroeconomics , botany , management , biology
This study develops an econometric methodology for estimating dynamic production models with sequential intermediate input decisions. Two problems arise in the study of intermediate inputs: intermediate input decisions may be endogenous to final output, and intermediate inputs are likely to be correlated with each other and other variables, making identification and estimation difficult. The econometric model measures the productivity of intermediate inputs, taking into account the farmer's sequential input decisions and input productivity differences during the growing season. A multistage Cobb‐Douglas model of wheat response to irrigation water is used to illustrate the proposed methods.