| Abstract: | Two sets of U.S. agricultural product supply and input demand relationships, including cross-price effects, are reported for five commodity groups and four variable input groups for the 1951-1982 period. They are obtained (a) by direct econometric estimation on U.S. data, and (b) by geographic aggregation from econometric estimates for each of ten regions comprising the contiguous 48 states. The Supply and demand formulations are derived from a restricted profit function, under the assumptions of competitive behavior. The functional form selected for estimation is based on the Box-Cox procedure. A test is developed for the selection of numeraire. Geographic aggregation procedures are developed. Elasticities are estimated for each region and for the U.S., and the effects of upward-sloping input supply curves are examined at the national level. Symmetry, homogeneity, and convexity in prices were maintained in the estimation; monotonicity was checked at every point of estimation and never significantly violated. Tests for global and local Hicks' neutral technical change in outputs and variable inputs were rejected in every region and U.S. estimates. Tests for nonjointness in production show the importance of using a multiproduct modeling approach. Parameters that are significant across regions and the U.S. show consistent output-output, input-input, and input-output relationships. Elasticities tended to be small in absolute values. The effect of upward-sloping input supplies is to make elasticities even smaller in absolute value. The results document the extreme diversity of production relationships in the U.S., and thus, the importance of considering the effects of changes in economic conditions and government agricultural policies on each region. |
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