Econometric analysis of farm machinery investment and simulations under alternative energy, price support, and export policies

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1981
Authors
Gunjal, Kisan
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Economics

The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).

History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.

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1898–present

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  • Department of Economic Science (1898–1910)
  • Department of Economics and Political Science (1910-1913)
  • Department of Applied Economics and Social Science (1913–1924)
  • Department of Economics, History and Sociology (1924–1931)
  • Department of Economics and Sociology (1931–1967)

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Abstract

The historical trends in structure, extent, and intensity of agricultural mechanization are analyzed in this study. The numbers of tractors, grain combines, corn pickers and picker shellers, pickup balers, and field forage harvesters peaked during the early 1960s. The decline in their numbers after the '60s is brought about mainly by the qualitative changes in those machines. The total tractor horsepower on farms also increased over the period 1963-79. Analysis of measures such as acres per horsepower, number of tractors and combines per farm, and acres per tractor and combine indicates that the intensity of machinery-use has increased over the last four decades. The productivity of machinery input in agricultural production has also increased;Based on the various investment theories, the alternative models of stock adjustment, expectations, and derived demand type are estimated for tractor and other machinery investments at the national and regional levels using 1950-77 annual data. Investment demand functions for harvesting machinery are estimated at the national level. Statistical tests for structural change in the machinery investments are performed. The demand elasticities with respect to prices, income and other economic variables are calculated. In general, the other machinery demand is the most elastic and the harvesting machinery demand is the least elastic with respect to their own prices. Harvesting machinery may have a higher priority in the annual machinery purchases of farmers and hence a lower elasticity of demand. In general, the tractor demand elasticity with respect to its own price as well as aggregate crop price is increasing from west to east;Dynamic multipliers expressing the long-lasting effects of the interest rates, price of fuel and oil, and net farm income are calculated for selected machinery investments. The impact and long-term multipliers are also presented;Finally, a block recursive simulation model of the regional farm machinery investments is developed. The relevant variables are selected from agriculture, industry, and economy in general to complete the linkages specified in the model. The regional tractor and other machinery investments and national tractor, harvesting machinery, other machinery, and all machinery investments are predicted up to 1990. The potential effects of six alternative policies of energy prices, support prices and agricultural exports on future farm machinery investments are also analyzed.

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Thu Jan 01 00:00:00 UTC 1981