Universidad y ciencia
Print version ISSN 0186-2979
A translog cost function was applied in this study to derive a system of eight input demands (labour, tractors, threshing machines, commercial and development bank credits, and nitrogen, phosphate and potash fertilisers), employing the time series 1975-2006 in order to determine the composition and behaviour of agricultural production in Mexico. The prices and input quantities and the agricultural Gross Domestic Product (GDP) of 1994 were used as output. Restrictions of symmetry and homogeneity were placed on the model, and the estimation was carried out using a system of apparently non-related equations. The Allen-Uzawa partial substitution elasticities between pairs of inputs were calculated, resulting in non-elastic demands. The complimentary inputs included labour and tractors, development bank credit and phosphate fertilisers, while the substitute inputs included labour and commercial bank credit, tractors and threshing machines, development bank credit and commercial bank credit. Labour and credit represented 91 % of the cost structure. The development bank credit was directly related to production, although at present it is insufficient to provide an impulse for agricultural development. It is necessary that the commercial and development banks increase their credits by 2.32% and 0.22% respectively in 2009.
Keywords : Production; demand systems; translog cost function; inputs; elasticities.