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Empirical investigation of investment behaviour in Australia's pastoral region
Journal article   Peer reviewed

Empirical investigation of investment behaviour in Australia's pastoral region

F W Agbola and Steve R Harrison
Australian Journal of Agricultural and Resource Economics, Vol.49(1), pp.47-62
2005
url
https://doi.org/10.1111/j.1467-8489.2005.00277.xView
Published Version

Abstract

adjustment costs pastoralism supply response
Optimal intertemporal investment behaviour of Australian pastoralists is modelled using panel data for the period 1979-1993. Results indicate that quasi-fixity of inputs of labour, capital, sheep numbers and cattle numbers is characteristic of production in the pastoral region. It takes about two years for labour, four years for capital and a little over two years for both sheep numbers and cattle numbers to adjust towards long-run optimal levels. Results also indicate that, after accounting for adjustment costs, own-price product supply and input demand responses are inelastic in both the short and long run. © Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Ltd 2005.

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Agricultural Economics & Policy
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