A Dynamic Model of Milk Production Response for Pakistan

Muhammad Akmal

Abstract


Economists have long been analysing the determinants of milk
production while focusing on the relationship between milk price and
production. Brandow (1953) used a single equation regression procedure
to estimate the supply response function for the United States.
Halvorson (1955) also used a single equation regression .procedure to
analyse the determinants of milk production per cow and found milk
production to be highly price inelastic. In another study, Halvorson
(1958) used the Nerlovian distributed lag model to estimate both
short-run and long-run price elasticities of milk production. Here, he
found the long-run price elasticities of United States milk production
to be in the range of 0.30 to 0.50. Chen et af. (1972) estimated milk
production response for both a polynomial and a geometrically declining
distributed lag price structure. They found long-run price elasticity to
be 2.53. Buckwell (1982) adapted a theory of farm size demonstrated by
Kislev and Peterson (1982) to model milk production behaviour in England
and Wales. Burton (1984) used a model of the United Kingdom dairy sector
to determine simultaneously herd size, number of culls, replacement
heifer price, and milk price. In a recent study, Chavas and Kraus (1990)
developed a dynamic model of a dairy cow population and milk supply
response and applied it to the US Lake States. The authors also
calculated dynamic supply elasticities and found the response of supply
to market prices to be very inelastic in the short run.

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DOI: https://doi.org/10.30541/v32i4IIpp.873-884

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