Intensive margin of land use in CGE models – Reviving CRESH functional form

Simola, Antti

doi:10.1016/j.landusepol.2015.06.026

Cited by 5 publications

(1 citation statement)

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“…The underlying assumptions are constant returns to scale and separability, meaning that the marginal rate of substitution between inputs aggregated in one nest is independent of the quantity of any other inputs used. However, the structure of the 'technology tree' is rarely empirically founded and thus is often determined by researchers' intuition (Simola, 2015).…”

Section: Agr Ic U Lt U R a L Product Ion St Ruct U R E S I N Econom Y...mentioning

confidence: 99%

Labour‐saving technologies in smallholder agriculture: An economy‐wide model with field operations

Feuerbacher

Luckmann

2023

Aus J Agri & Res Econ

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Labour‐saving technologies are relevant for agricultural development. Yet, as this study shows, they are poorly integrated into agricultural production functions of economy‐wide models. We report a computable general equilibrium (CGE) model, which explicitly incorporating field operations (e.g. land preparation, weeding or harvesting) in the context of smallholder agriculture. The field operations approach allows to model technological trade‐offs in organic and conventional production systems at various stages of the agricultural production process. Simulating a structural change scenario, we compare the performance of the field operations approach with published benchmark production structures by assessing how they replicate empirically observed changes in land and agrochemical use. This benchmark analysis shows that incorporating field operations replicates the observed empirical changes most accurately and allows for more realistic modelling of labour‐saving technologies. We use the field operations model to investigate three policy options to mitigate labour shortages in the agricultural sector of Bhutan. Permitting the employment of Indian workers in agriculture has the highest short‐term potential in this respect. We find that subsidising agricultural machinery hiring services and removing import tariffs on agrochemical inputs are found to be less effective. Further options for model developments, such as combining field operations and labour market seasonality, are highlighted.

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Section: Agr Ic U Lt U R a L Product Ion St Ruct U R E S I N Econom Y...mentioning

confidence: 99%