Technology Structure of the Rice Sector of Japanese Agriculture: (II) A Translog Variable Profit Function Approach

Abstract

As mentioned already in “The Objectives of Part I,” this chapter seeks to introduce a single-product variable profit (VP) function to investigate the rice production structure for the period 1956–97 in a parallel fashion to the VC function approach employed in Chapter 2. Based on the parameter estimates of the VP function system, we will investigate quantitatively the output supply elasticity, the variable factor demand elasticities with respect to output price and variable factor inputs prices, the degrees of returns to scale, and the shadow prices of the quasi-fixed factor inputs, in particular, land. Several features of introducing the VP function may be listed as follows.