THE TRANSLOG COST FUNCTION AND THE COTTON INPUTS MARKET IN THE STATE OF SAO PAULO: THE CASE FROM CAMPINAS
Thereza Christina Pippa Rochelle, Joaquim Bento de Souza Ferreira Filho
Abstract
In this study, the cotton cultivation cost function from the Divisao Regional Agricola (Regional Agriculture Division --DIRA), Campinas, state of Sao Paulo, is estimated using the translog model. Cotton input market relationships are analyzed, employing estimates of the input price-elasticity of demand and elasticity of substitution between factors. The production factors considered are labor, machine operations, fertilizers, seeds, and other costs. The results show that labor expenses are the major costs of cotton production in the Campinas DIVR. Labor and machine operations are complementary inputs, but a substitution relationship prevails between the other pairs of production factors. Allen elasticity of substitution estimates also show that labor and machine operations are complementary, and there is substitutability between the other factors. However, using the Morishima elasticity of substitution concept, labor and machine operations are shown to be complements for labor price change and substitutes for machine operations price change.
Keywords
References
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