A Translog cost function analysis of Turkish agriculture

Sel, Güney
This work examines the costs occurred in the agricultural production process in Turkey employing agricultural data from 1970 to 1999. A Translog specification will be used to represent the cost pattern of the Turkish Agricultural Production. The Translog Cost Function is the most frequently used flexible function in empirical work, which is well known for its flexible functional form in terms of the local second-order approximation to any arbitrary functional form. The model that is considered in this study, includes 4 inputs; land, tractor, fertilizer and labor and 1 output as total value of agricultural production calculated with 1968 prices. The empirical results indicate that all factors are substitutes except Tractor and Fertilizer. These two factors have negative cross elasticities meaning that an increase in tractor (or fertilizer) prices leads to a decrease in fertilizer (or tractor) demand.


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Citation Formats
G. Sel, “A Translog cost function analysis of Turkish agriculture,” M.S. - Master of Science, Middle East Technical University, 2002.