FUNCTIONAL FORM AND U.S. AGRICULTURAL PRODUCTION ELASTICITIES
By: Shumway, C. Richard; Lim, Hongil
Shumway, C. Richard; Lim, Hongil, FUNCTIONAL FORM AND U.S. AGRICULTURAL PRODUCTION ELASTICITIES, Journal of Agricultural and Resource Economics, Volume 18, Issue 2, December 1993, Pages 266-276
Because so much agricultural policy analysis utilizes estimates of supply and demand elasticities, it is crucial to obtain the most reliable estimates possible. Where reliability cannot be adequately assessed, the sensitivity of elasticities to equally plausible a priori specifications should at least be ascertained. In this article, the sensitivity of U.S. output supply and input demand elasticities to choice of functional form. Considerable sensitivity is found to choice of functional form. Although most frequently used, the translog is generally the outlier and is the least preferred among the alternatives.