Ph.D. - Agricultural Economics

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    Linear programming with iterative modification of the objective function and restraints vector
    ([Honolulu] : Hawaii Agricultural Experiment Station, University of Hawaii, 1968) Larson, Arnold B (Arnold Bendik), 1924-1973 ; Hogg, H. C (Howard Carl) ; Hogg, H. C (Howard Carl)
    Development of land resources poses many problems for the planning agency. From the viewpoint of the economist perhaps the most important problems are those relating to the desirability of a project in terms of some income or efficiency objective. Typically, a project objective is stated as the maximization of individual, regional, or national income depending upon the jurisdiction of the developing organization. To effectively evaluate a land development, in terms of its objectives, it is necessary to anticipate the pattern of land use that will likely result in the project area. This study presents a quantitative approach for estimating land use patterns when use of the project land is restricted to agriculture. Planning problems concerned with agricultural as compared to non-agricultural uses, project financing, conditions of repayment, and form of tenure are ignored. The empirical application of the estimating procedure consists of estimating land use patterns for a project currently being undertaken by the State of Hawaii. Objectives: The primary objective is to develop a procedure for estimating the perfect competition equilibrium production of several crops, on lands of varying quality, in spatially separated producing areas. Market supply and demand equations are include in the model so that the patterns of land use will be established by market forces. The model indicates, by physical land productivity class and project area, the acreage used to produce each crop. It also gives the equilibrium market price and quantity supplied for each included commodity. The objective of the empirical applications of the model was to estimate patterns of land use based on different wage rate, labor availability, and unit size assumptions for several tracts of state-owned land that are included in a current development project. These lands, which are located at Waimanalo and Waianae Kai on the Island of Oahu and at Hoolehua on the Island of Molokai, make up the three project areas considered in this study. Procedure: The first step was to construct cost of production and yield budgets, by land productivity class, for a group of crops that represent most of the production alternatives faced by prospective farmers in the project areas. These budgets are based upon existing cost of production studies supplemented by interviews with crop specialists. Because of limited resources, only those crops for Which cost studies are presently available are included in the analysis. This group of crops includes pineapple, pasture, papaya, apple banana, tomatoes, snap-beans, cantaloupe and Manoa lettuce. Market supply and demand functions were developed for each crop and included in the estimating model. This was done in an effort to duplicate the market forces that actually contribute to the establishment of a land use pattern. For the purposes of this analysis, it is assumed that all vegetable crop production will be sold on the Honolulu market. This market restriction is imposed because producers will not export until the Honolulu market price falls to a point Where export offers the most profitable outlet. This price would probably be somewhat lower than the West Coast price less transportation charges. Available information suggests that under prevailing management practices, which are assumed, this price would not be sufficient to cover production costs (39; 49, p. 11). The estimating model is an iterative linear programming system that allows for adjustments in supply from existing producers as price changes and does not permit production to exceed quantity demanded at any given price. This model constructs a static equilibrium for a specified number of crops while allowing them to compete with one another for scarce resources as they would in the market. The scarce resources are allocated to their most profitable use.
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    Agricultural production models based on technical coefficients derived from production and profit functions
    ( 1976) Mian, Mohammad Aslam
    From a methodological point of view, agricultural production models have been constructed using the classical approach of production functions. But the problems posed by the management factor and the simultaneous determination of variable inputs and outputs by the farm firm generally lead to biased estimates. The profit function was developed as an alternative to the production function. Since the arguments of this function are normalized input prices and fixed inputs, which are exogenously determined, the simultaneous equations bias is avoided. However, the non-availability of secondary data and the difficulty of collecting primary data, especially on prices and on the wage rates of agricultural labor in a developing economy, limit the applicability of profit functions. This study compared with results of both approaches applied to the agriculture of Pakistan. The enterprise combinations, obtained from linear programming models based on technical coefficients derived from production and profit functions, were also compared. The data, pertaining to the cropping year of 1974-75, were collected through a survey of 71 farms selected from a cluster of four villages in the Lyallpur district of Pakistan. The Ordinary Least Squares was the major analytical tool used to estimate the coefficients of the production and profit functions. A Cobb-Douglas form of the production function was postulated. Overall, the results indicated that whereas production functions produced many negative output elasticities, profit functions yielded coefficients consistent with production theory. The output elasticities of manual labor derived from the profit functions of sugarcane, cotton and wheat were significantly smaller than their counterparts derived from production equations. Similarly, output elasticities with respect to irrigation water also decreased. The production functions for some crops had negative coefficients for land while the profit functions produced significant and positive response coefficients for the same input. The drop in the cited coefficients and the improvement in those for land may be due to the reduction or elimination of the simultaneous equations bias in the estimates. The superiority of the profit function approach to that of the production functions may not be concluded as the production function model is capable of doing equally well if the production relationship is specified and tested in terms of simultaneous equations rather than a single equation. Ratio estimates and the reciprocals of statistically significant marginal physical products derived from production and profit functions were used as technical coefficients in the linear programming model. The model based on ratio estimates yielded results consistent with actual observations on farm enterprise mix. Thus, the hypothesis of rationality and responsiveness of farmers to changes in production determining forces is not rejected. The models based on technical coefficients derived from production and profit functions yielded different results; the differences lie in extent of production but not in its direction. This demonstration of the use of technical coefficients in L.P. production models showed that, theoretically as well as empirically, it is possible to construct models based on coefficients obtained from the two approaches of production and profit functions and that these coefficients were not very different from ratio estimates. However, there is a need to test these approaches on a more adequate data set such as time series of a cross-section.
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    Economic analysis of fertilizer application in Punjab-Pakistan
    ( 1975) Salam, Abdul
    Pakistan has achieved a breakthrough in farm production in recent years. It has been mainly due to increased acreage under high yielding varieties of foodgrains and other crops, improved irrigation supplies and the increased use of purchased inputs such as chemical fertilizers, pesticides and farm machinery. In this era of world wide food and fertilizer shortages it is important to identify as well as quantify the contribution of various farm inputs and particularly that of fertilizers to farm production. This would be useful in providing alternatives for increasing farm production in the short run under given technological conditions. This study was designed in an attempt to estimate the contribution of fertilizers and other farm inputs to the production of major crops in Punjab province of Pakistan. The crops included were Mexi-Pak wheat, local wheat, Basmati rice, IRRI rice, Jhonna rice, maize, cotton and sugarcane. The other objectives of the study were to compare the levels of fertilizer application among various farm categories, to determine the sources of financing fertilizer purchases and fertilizer supplies and to analyze the factors responsible for the inadequate use of fertilizers where that situation exists. The study was also designed to determine the influence of various agro-economic factors on the use of fertilizers in the province from time-series data. The primary data for the study were collected through a farm survey conducted in the fall of 1973. The data pertained to the cropping year 1972-73. In all, 192 farmers were interviewed. These were located in 16 villages in Gujranwa1a and Sahiwal districts. These two districts represent the typical wheat-rice and wheat-cotton cropping patterns; the major cropping patterns followed in the canal irrigated districts of the province. The production function has been the major analytical tool used in this study in the analysis of cross-sectional data. The ordinary least squares method of multiple regression was used to estimate the coefficients of production functions for the crops under study. This method was also used to analyze the impact of agro-economic factors on fertilizer use from the time-series data. The production function analysis suggests that the use of chemical fertilizers is highly profitable on Mexi-Pak and local wheat, Jhonna rice and cotton. There is considerable potential for increasing farm production of these crops through the increased use of fertilizers. From the analysis also, it appears that there is scope for increasing production of certain crops through increased use of labor. Higher farm output of sugarcane and maize was associated with the greater use of nitrogenous fertilizers. However, the analysis was not conclusive for Basmati and IRRI rice in this regard. The average per acre use of chemical fertilizers for the Mexi-Pak wheat, Basmati rice, cotton and sugarcane was higher on small farms as compared to medium and large farms. Urea was the most popular fertilizer with the farmers. Personal savings of the farmers and non institutional sources of credit were the major sources for financing the farmers' use of fertilizers. The commission agents and local dealers were cited as the chief suppliers of fertilizers by the farmers. High prices of fertilizers, lack of financial resources and the non-availability of fertilizers were the main reasons given by the farmers for the inadequate use of these materials. The analysis of time-series data suggests that the relative price of nitrogenous fertilizers has been quite important in influencing the use of these fertilizers in the province during the period of 1959-60 to 1972-73. Another important factor in this regard has been the increase in acreage under major crops, especially high yielding varieties of food grain crops. The use of fertilizers has been increasing over time. This has been probably due to increased information in the agricultural sector regarding the importance of fertilizers, and increased supplies and various market development activities of the private and public sectors.
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    Economics of urban water demand: a case study of the Honolulu Board of Water Supply
    ([Honolulu], 1973) O, Ho-sŏng
    The objectives of this study are to construct and analyze the patterns and trends of water demand in the service areas of the Honolulu Board of Water Supply, and to identify factors affecting water demand with the intent of deriving useful policy implications as well as improving on urban water demand research. To accomplish the objectives, a thorough review of the literature was conducted and some suggestions for methodological improvement were developed. Classical univariate time series analysis, data disaggregation methods, and trend analysis were used to construct the patterns and trends of water consumption. Significant variables, which affect increasing per capita water consumption, were identified through a logical sequence of data processing and reasoning. The results were confirmed by the methods of sample survey and regression analyses. Most of the data used in this study were compiled from water consumption records obtained from the Board of Water Supply. During the period of 1960-1971, the average daily per capita water consumption increased by about 27 percent from 139 gallons to 177 gallons. When per capita consumption was estimated by nine service areas per capita consumption figures depicted not only a wide dispersion in absolute value but also revealed different rates of growth. The seasonal patterns of water consumption were examined on a monthly basis. There is a steadily widening seasonal fluctuation in water use over time with summer consumption increasing faster than that for winter use. The trend of sprinkling demand was estimated from maximum and minimum day water consumption trend equations. There is a difference in per capita consumption between single and multiple family dwellings, which is attributable mainly to outdoor sprinkling by households occupying single family dwellings. The water consumption level in established residential areas has remained essentially constant over time. The overall increase in per capita consumption results from water use for other than indoor domestic purposes. Water consumption has been expanding most noticeably where there is significant construction activity. Per capita water consumption data were fitted by linear regression to value of construction completed and annual changes in rainfall. The equation explained 96 percent of the total variation of per capita consumption and the two independent variables were statistically significant. There is no evidence that residential water users have been responsive to price changes in the past. Large industrial water users appear to respond to price increase but commercial users do not. Existence of price responsiveness in industrial demand seems to have a close relationship with alternative water supply sources and nonexistence of price responsiveness in commercial demand may be associated with an incidence structure of water bill payments, which also has an important meaning in measuring the price elasticity of residential demand. The demand approach for projection of water use is advocated by most urban water studies. Major implications of this study are that (1) the requirement approach is still a practical means of forecasting future water need, (2) there are serious institutional limitations in the use of price as a means to promote conservation but peak load pricing may be an effective way of reducing the inequitable distribution of water supply costs, and (3) the complex economic forces that have been operating through the existing institutional framework call for some form of unified management of groundwater resource for the purpose of conservation.
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    Adoption of agricultural innovations in a northeastern Thai village
    ([Honolulu], 1971) Fleckenstein, Friedrich W. von
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    An economic analysis of the competitive position of the Hawaii egg industry
    ([Honolulu], 1969) Lum, David Tin Ei
    The many changes taking place in the economy of Hawaii as well as in the industry itself lead to a questioning of the future of the industry in Hawaii. The major objective of the study was to evaluate the competitive position of the Hawaii egg industry with respect to California. A survey of 14 egg ranches on Oahu was conducted from which the cost of producing eggs in Honolulu county was determined. The information gathered provided the basis for studying production factors affecting the competitive position of the Hawaii industry. Four production factors were investigated in depth~ feed cost, flock replacement cost, labor cost, and the effect of increased flock size. Some of the facts uncovered by the study were: Feed and flock replacement costs are higher in Hawaii. Most of the differences in cost were due to transportation. Labor cost in Honolulu was significantly higher than the three California counties used for comparison. However, since local producers received higher prices for eggs and poultry meat, net farm income per layer was higher in Hawaii. Increased flock size could reduce production cost per layer, while the attrition of ranches with small flocks could add to the industry's competitive strength. Marketing factors affecting the competitive position of the egg industry were categorized under two groups~ the length and complexity of the marketing channel, and the competitive marketing actions of producers. It was found that transfer cost, which raises the price of production inputs, also raises the price of mainland eggs in Hawaii. The longer, more complex marketing channel of mainland eggs further increases the price of imported eggs. However, in spite of the higher marketing costs, mainland eggs can be sold at lower prices because of the lower cost of production. Current freight rates prohibit the importation of table eggs by air. While it may be physically possible to fly eggs in the cargo holds of the jumbo jets, it is doubtful that untreated shell eggs will be flown to Hawaii. The principal conclusion drawn from the available data is that competitive action by ranchers, advertising laws in Hawaii, and consumers' preferences for local eggs are factors which combine to maintain current competitive strength. Hawaii poultry ranchers will be able to maintain the 95 percent of the fresh egg market in Hawaii.