Estimating feed utilisation matrices using a cost function approach

In this paper a multiple-output cost function framework is proposed to construct national feed balances or feed utilisation matrices (FUMs). The framework is applied to the Belgian compound feed industry. For estimation purposes a Symmetric Generalised McFadden (SGM) cost function is selected. The c...

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Bibliographic Details
Published in:Agricultural economics 1993-08, Vol.9 (2), p.109-126
Main Authors: Peeters, Ludo, Surry, Yves
Format: Article
Language:English
Subjects:
Life Sciences
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Summary:In this paper a multiple-output cost function framework is proposed to construct national feed balances or feed utilisation matrices (FUMs). The framework is applied to the Belgian compound feed industry. For estimation purposes a Symmetric Generalised McFadden (SGM) cost function is selected. The cost function is estimated using readily available time-series data for the period 1962–1988. Unlike previous studies based on duality theory, this study exploits the properties of nonjointness in animal feed production to establish a complete FUM. The allocation of feed ingredients among different livestock categories as well as the composition of various compound feeds are identified. Also own- and cross-price elasticities of demand for feed ingredients by type of livestock are reported.
ISSN:0169-5150
1574-0862
DOI:10.1016/0169-5150(93)90007-Y