Induced Technological Change in Canadian Agriculture Field Crops - Canola and Wheat: 1926-2003

A tractable two-stage constant elasticity of substitution (CES) production function is applied to disaggregated western Canadian wheat and canola data for 1926-2003 to investigate the induced innovation hypothesis. Time series properties of the data are analyzed using cointegration and error correction to assess causality in differentiating between technological change and factor substitution. The results provide empirical support for the hypothesis with respect to prairie wheat and canola production.