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

See all articles by Xiaoguang Chen

Xiaoguang Chen

Southwestern University of Finance and Economics

Hayri Onal

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics

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

Chen, Xiaoguang and Onal, Hayri, Modeling Agricultural Supply Response Using Mathematical Programming: A Note on Crop Mixes (October 15, 2010). 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, Available at SSRN: https://ssrn.com/abstract=1709545 or http://dx.doi.org/10.2139/ssrn.1709545

Xiaoguang Chen (Contact Author)

Southwestern University of Finance and Economics ( email )

No55 Guanghuacun Street
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Chengdu, Sichuan 610074
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Hayri Onal

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics ( email )

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Urbana, IL 61801
United States
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