Abstract
The objective of this study is to estimate short run supply responsiveness, including interactions, among thirteen major U.S. field crops. Although major emphasis is on response to price changes, the effects of risk and commodity programs on production decisions are also examined. After initial hypothesis testing, remaining attention is focused on sensitivity of conclusions to changes in model specification. Powell and Gruen's constant elasticity of transformation (CET) linear commodity supply model is adapted and applied to the estimation of supply response for the years 1947 and 1975. The CET commodity supply model is utilized because it reduces the number of price parameters requiring estimation in a fully specified multiproduct supply model. This reduction is possible because (a) the commodity price parameters (i.e., elasticities of transformation) are symmetric and (b) each commodity supply equation is homogeneous of degree zero in commodity prices. The theoretical derivation of the CET commodity supply model is expanded in this study. Risk is added as a behavioral variable. The definition of the shift function is enlarged to include input level, technology, government commodity policies, and weather. Input supply response is included in the model to permit a more accurate estimation of short run commodity supply response.
Green, Robert Clifton (1978). A linear CET commodity supply response model for thirteen agricultural field crops in the U.S. Texas A&M University. Texas A&M University. Libraries. Available electronically from
https : / /hdl .handle .net /1969 .1 /DISSERTATIONS -324093.