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The Effect of Increased Energy Prices on Agriculture: A Differential Supply Approach

Published online by Cambridge University Press:  26 January 2015

Charles B. Moss ,
Grigorios Livanis  and
Andrew Schmitz
Charles B. Moss
Affiliation:
Food and Resource Economics Department, University of Florida, Gainesville, FL
Grigorios Livanis
Affiliation:
International Business and Strategy, College of Business Administration, Northeastern University, Boston, MA
Andrew Schmitz
Affiliation:
Food and Resource Economics Department, University of Florida, Gainesville, FL
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Abstract

The increase in energy prices between 2004 and 2007 has several potential consequences for aggregate agriculture in the U.S. We estimate the derived input demand elasticities for energy as well as capital, labor, and materials using the differential supply formulation. Given that the derived input demand for energy is inelastic, it is more price-responsive than the other inputs. The results also indicate that the U.S. aggregate agricultural supply function is responsive to energy prices.

Keywords

differential input demandconcavity constrainedenergyC30Q11Q42
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 42 , Issue 4 , November 2010 , pp. 711 - 718
Copyright
Copyright © Southern Agricultural Economics Association 2010

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