SUPPLY RESPONSES IN THE SOUTH AUSTRALIAN POTATO INDUSTRY

The potato industry in South Australia is characterised by very unstable prices. One hypothesis for this instability is that potato growers' acreage responses follow a cobweb pattern, that is, a one year lag of acreage to price. This hypothesis is tested, together with a two year lag and a distributed lag. The distributed lag model seems the most satisfactory and gives a short-run elasticity of acreage to price of 0.36 and a long-run elasticity of 1.09. An alternative to the lagged price hypothesis is the "constant cash return" hypothesis which postulates that potatoes are grown to provide a certain cash income to permit farm development. This explanation of acreage response only seems relevant in the dairying and fat lamb areas of the State.


Issue Date:
1966-06
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/22670
Published in:
Australian Journal of Agricultural Economics, Volume 10, Number 1
Page range:
52-59
Total Pages:
8




 Record created 2017-04-01, last modified 2017-04-04

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