Estimates of Production Response in the UK Cereal Sector Using Nonparametric Methods.

This paper reports an alternative approach to the estimation of aggregate production response. The principles of the nonparametric analysis of production data are outlined. The weak axiom of variable profit maximisation is introduced and used to define netput schedules. Data from the national Cereals Survey are used as the basis for the estimation of nonparametric schedules for cereal outputs and variable inputs. The results indicate that the sample is consistent with an assumption of variable profit maximisation and that, under an assumption of input fixity, the response of the main cereals to own-price changes is inelastic. Copyright 1996 by Oxford University Press.