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Application of Price Elasticities to Farm Policy Analysis: Comment

Published online by Cambridge University Press:  28 April 2015

Chung-Liang Huang*
Affiliation:
Department of Agricultural Economics, Georgia Station, University of Georgia
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Extract

In an article titled, “Application of Price Elasticities to Farm Policy Analysis,” Bateman and Stennis [1] present an intriguing analysis of the use of demand elasticities for U.S. farm policy in the world market perspective. They present two different approaches to demonstrate the importance of the world market to U.S. agriculture and conclude that unilateral reduction in production of U.S. farm products is not likely to enhance and to maintain farm income unless the farm commodities under consideration are almost perfectly inelastic in the world market and/or the U.S. is the only or dominant source of supply. The analyses are based on the estimated elasticities and the logic of economic deduction.

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Copyright
Copyright © Southern Agricultural Economics Association 1979

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References

[1]Bateman, W. L. and Stennis, E. A.. “Application of Price Elasticities to Farm Policy Analysis,” Southern Journal of Agricultural Economics, Volume 10, Number 2, December 1978, pp. 107111.Google Scholar
[2]deVries, B. A.Price Elasticities of Demand for Individual Commodities Imported into the United States,” International Monetary Fund Staff Papers, Volume 1, 1951, pp. 397419.CrossRefGoogle Scholar
[3]Johnson, P. R.The Elasticity of Foreign Demand for U.S. Agricultural Products,” American Journal of Agricultural Economics, Volume 59, 1977, pp. 735736.CrossRefGoogle Scholar
[4]Orcutt, G. H.Measurement of Price Elasticities in International Trade,” Review of Economics and Statistics, Volume 32, 1950, pp. 117132.CrossRefGoogle Scholar
[5]Tweeten, L.The Elasticity of Foreign Demand for U.S. Agricultural Products: Comment,” American Journal of Agricultural Economics, Volume 59, 1977, pp. 737738.CrossRefGoogle Scholar