M. Rashidghalam; Gh. Dashti; Z. Rasooli; F. Aminian
Abstract
Implementation of effective input policies and technology consistent with production structure contributes to the economic use of the production. Understanding the price elasticity of input and relationship between inputs in the agricultural sector is helpful in choosing appropriate input policy. In ...
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Implementation of effective input policies and technology consistent with production structure contributes to the economic use of the production. Understanding the price elasticity of input and relationship between inputs in the agricultural sector is helpful in choosing appropriate input policy. In this study we examine the production structure of pistachio in Damghan. To achieve the goal, Translog Cost Function and Derived Cost Share Equations were estimated using the theory of duality in a system of simultaneous equations within the framework of unrelated regression. Data were collected from 177 farmers in 1387. According to the results, price elasticities of inputs are negative. All of the cross- elasticities of inputs indicate complementary relationship between inputs, except for chemical fertilizer and labor as well as elasticity between chemical fertilizer and poison. Based on the calculated price elasticity, demand of labor, poison and animal fertilizer are inelastic. The results of study showed that the pistachio production has decreasing returns to scale at 0.72 percent. This indicates that farmers are not able to economize their products by increasing the size of their farms. The study recommends investigations on policies aimed at realizing the factors that increase production including pistachio fertilizer, poision and labour.