An Analysis of Factor Demand Elasticity for Wheat Production in the Trakya Region of Turkey

Abstract

The study investigated the elasticity of factor demand of wheat in the Trakya region of Turkey. Data were collected from 167 wheat producers in the Trakya region. The translog cost function was used to determine the relations among the production factors. Price-demand, cross price-demand and Morishima technical substitution elasticities and Allen partial substitution elasticities were calculated. The highest input price-demand elasticity was equal to -1.36 for diesel fuel, indicating that wheat producers were more sensitive to diesel fuel prices than the other input prices. On the other hand, the lowest input price-demand elasticity was equal to -0.63 for labor cost. The highest Morishima elasticity was equal to 2.69 between the cost of fertilizer and that of pesticides. The efficiency coefficients and their signs seemed to indicate that wheat producers were highly sensitive to increases in input prices. Farmers had less use high price input or more use substitution inputs for cost minimization.