Modeling Agricultural Supply Response Using Mathematical Programming: A Note on Crop Mixes
Chen, X. and H. Önal. 2012. “Modeling Agricultural Supply Response Using Mathematical Programming and Crop Mixes”. American Journal of Agricultural Economics, 94(3):674-686
24 Pages Posted: 16 Nov 2010 Last revised: 29 Aug 2013
Date Written: October 15, 2010
Abstract
Mathematical programming models are widely used in agricultural sector analysis. Lack of micro-level data and computational reasons necessitate aggregation of individual producers into regional representative units when working at sectoral level. This usually leads to unrealistic and extreme specialization in supply responses. McCarl (1982) introduced the ‘historical crop mixes’ approach to avoid extreme specialization. This paper extends the crop mix approach by generating additional synthetic crop mixes based on estimated supply response elasticities and systematically varied market prices. While avoiding extreme specialization this approach provides sufficient flexibility when future supply responses can be drastically different from past responses.
Keywords: Mathematical Programming, Aggregation, Crop Mixes, Synthetic Mixes
JEL Classification: C6
Suggested Citation: Suggested Citation
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