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Alternative specifications of models of the supply response of Australian wheat growers and their economic implications are considered in terms of the existence and nature of production lags, and the choice between expected prices and expected gross returns as the preferred explanator of producers' response to changing economic conditions. The analysis indicates that there are lags which are due primarily to the difficulties and costs of rapid adjustment rather than to the time required to revise expectations. The statistical results were similar for the alternative specifications of gross margins and prices as the economic decision variables. However, the price elasticities derived using the gross margins specification were about a third of those using the prices specification. The gross margins specification yielded additional information in the form of yield and input cost elasticities.

Subject(s): Marketing

Issue Date: 1980-08

Publication Type: Journal Article

PURL Identifier: Published in: Australian Journal of Agricultural Economics, Volume 24, Number 2 Page range: 129-140

Total Pages: 12

Record appears in: Australian Agricultural and Resource Economics Society (AARES) > Australian Journal of Agricultural Economics

Author: Sanderson, B.A. ; Quilkey, John J. ; Freebairn, John W.


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