Cost function approach to the rice production in Korea
1992
Jeong, A. (Chiba Univ., Matsudo (Japan). Faculty of Horticulture) | Sugimoto, Y.
The Korean agriculture has undergone various changes with the radical growth of the industrial sector in 1970s. The most drastic change was transfer to labor from the agricultural sector to the industrial sector, and this caused the deficiency of labor in the agricultural sector. As a result, the mechanization in agricultural sector was accelerated in order to make up for a deficiency of labor, and more variable goods such as fertilizer, agricultural chemicals were input to increase the rice production. It led to the technical change in the rice production in Korea. This study tries to find out the character of the technical change, and the relationship of factor demands in the rice production. Inputs of the rice production are divided into 4 factors such as labor, land, variable goods, and farm implements. For our purpose, annual time-series data (1976-1987) were employed to estimate the translog cost function. One of the merits of this functional form is that it has no a priori restriction on substitution possibilities among the factors of production. To analyze the technical change bias, the percent change in factor cost share with respect to time was estimated. To analyze the relationship of the factors, the partial elasticities of substitution and own-price elasticities of factor demand were estimated. The estimated bias of technical changes in the rice production is labor saving, farm implements using. The estimated partial elasticities of substitution suggest that labor is a complement of land, and is a substitute for all other inputs. Variable goods are complements farm of implements
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