Input-substitution and technical change in irish agriculture - 1953-1977

Abstract

This paper seeks to find explanations for agriculture's changing resource structure over the past 25 years, using the framework of neoclassical production theory. The translog functional form was used to estimate the factor elasticities of substitution. The analysis distinguished two time periods, 1953-1970 and 1953-1977. The estimates did not satisfy all of the necessary conditions for a well behaved technology, though the own price elasticities for 1953-1970 had the correct signs. The results indicate that labour and machinery were substitutable with an elasticity of substitution close to one over the period 1953-1970. Labour and materials were highly substitutable with an estimated elasticity in excess of one. Technical change was found to be machinery and materials using and labour saving.