Estimating Farm‐Level Input Demand and Wheat Supply in the Indian Punjab Using a Translog Profit Function

Abstract

Abstract Application of the translog profit function to farm‐level data from Punjab, India, allowed a more disaggregated analysis of the farm production structure compared to the case of Cobb‐Douglas formulation. The flexibility afforded by translog formulation permitted measurement of the different impacts that exogenous variables have within and across input demand and output supply functions. Policy‐relevant elasticity estimates with respect to variable inputs and output prices, fixed inputs, a few soil‐related “state‐of‐nature” variables measured by soil analysis, and education, which are usually considered constraints to farm production, were obtained, and two examples of policy applications were developed.