The generation of output supply and input demand elasticities for a Johansen-type model of the Irish agricultural sector

Abstract

This paper attempts the estimation of an integrated output supply and input demand system for the Irish agricultural sector. The objective of the exercise is the generation of a set of elasticities to be used in the construction of a Johansen type model of the sector. Drawing on separability principles, the estimation problem is divided into three levels: the estimation of an aggregate profit function; a revenue function for aggregate output; a revenue function for aggregate tillage output; and a cost function for aggregate fertiliser consumption. Elasticities are obtained for each level and the integrated production system.

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