Journal Article

Testing for Behavioral Objective and Aggregation Opportunities in U.S. Agricultural Data

Shon P. Williams and C. Richard Shumway

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 80, issue 1, pages 195-207
Published in print February 1998 | ISSN: 0002-9092
Published online February 1998 | e-ISSN: 1467-8276 | DOI: http://dx.doi.org/10.2307/3180281
Testing for Behavioral Objective and Aggregation Opportunities in U.S. Agricultural Data

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To guide formulation of an aggregate model of U.S. agricultural production, this paper reports nonparametric test results for both behavioral objective and aggregation level. Nonparametric tests are implemented as heuristics to determine empirical support for simplified analytical structures. Evidence does not refute the joint hypothesis that producers behave collectively as though they are a price-taking, profit-maximizing firm with a convex technology subject to nonregressive technical change. The empirical results also support exhaustive aggregation of input categories, but much less aggregation of outputs. This paper reports the first known implementation of the nonparametric homothetic separability tests.

Keywords: aggregation; homothetic separability; nonparametric tests; profit maximization; Q100

Journal Article.  0 words. 

Subjects: Agricultural Economics

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