Resource adjustments, dynamic price responses, and research impacts in US agriculture, 1950-1982

Abstract

CHAPTER 3. DATA DESCRIPTION 42 The Inputs 42 iii Labor input 42 Capital stock 44 Land input 45 Intermediate inputs 45 The Outputs 47 The Research Variables 48 CHAPTER 4. THE ECONOMETRIC MODEL 50

Sequencing and the Success of Gradualism: Empirical Evidence from China's Agricultural Reform

“…The estimated value function is non-declining in p (wheat and maize), K 1 (sown area), and Z (agricultural research and irrigation investment), and is non-increasing in w (wage) and q (the price of labor and value of land). The only violation of monotonicity is found in K 2 (labor), a result commonly found in other studies (see survey by Warjiyo, 1991). When considering parameters significant at the 10 percent level, convexity is satisfied for the sets of equations; the own-price response matrices (A,B, and C) are all positive semi-definite.…”

“…Quasi-fixed inputs affect production in both the short-and long-run. A theoretical framework is described in Appendix A as well as in Warjiyo (1991).…”

“…The diagonals of the R matrix, in some sense, are exactly what we are interested in: a measure of how well markets allow factors to adjust. Appropriately, some researchers call these estimated parameters flexible acceleration coefficients (Warjiyo, 1991).…”

“…When these results are compared with results of similar adjustment cost analyses in other countries, one might conclude that China's crop sector was adjusting rather quickly. With the exception of Vasavada and Chambers (1986)-who found sown area for certain crops in the United States adjusts to a new optimum after two years-analysts estimate that sown area in Canada can take up to 15 years to equilibrate after exogenous shocks (Warjiyo, 1991); whereas labor requires 6 to 19 years (Warjiyo, 1991;Luh and Stefanou, 1991;Vasavada and Chambers, 1986). Despite the existence of policy-created barriers in China, adjustment may occur faster than in North America because the relatively labor-intensive farming systems and more responsive, small scale rural-based industrial sector ultimately make resource reallocation among sectors less costly.…”

Transition, development and the supply of wheat in China

“…The joint test of the two quasi¢xed inputs, M 11 M 22 À1 and M 12 M 21 0, generated an F-statistic of 482.3. Vasavada and Chambers (1986), who found soy bean sown area in the United States adjusts to a new optimum after two years, analysts estimate that land can take up to 15 years to adjust to disequilibrating exogenous changes (Warjiyo 1991); and labour requires 6 to 19 years (Warjiyo 1991;Vasavada and Chambers 1986;Vasavada and Ball 1988). It may be that despite the existence of policy-created barriers, the relatively labour-intensive nature of China's farming systems (which requires less ¢xed-capital investment), and less sophisticated character of the industrial sector (which requires lower levels of human capital for gaining entry, and lower learning costs, in general), ultimately make it less costly for resources to be reallocated among sectors.…”