Handbook on international trade policy

Abstract

s from differences in land quality across farms, location (and thus transportation costs in shipping crops), and differences in comparative advantage across crop types between farms. The production technology for each farm type, i, was assumed to be constant returns, and to take the constant elasticity of substitution (CES) form: (18.A13) gi B[ L i i (1 )Z i i ] 1 i i (P W, PZ) i (P W T , P Z, ) i N i i d Q M i 1T( ) ( i wi) M i 1pi t( i wi)i M i 1 [ i( d, R, Q) wi] C C N i 1 d i i( d, R, Q) N i 1 d i wi R M i 1 Tq( ) ( i wi) N i 1 d i [ i( d, R, Q) wi] 0 212 Handbook on international trade policy