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Abstract

A Diewert-flexible (dual) cost function was used to derive a system of conditional factor demand equations for Louisiana rice producers. Generalized Leontief cost and factor share equations were fitted for the 1955-87 period using Zellner's SURE system estimation procedure. The Aitken parameter estimates reveal that: (1) the optimal input mix of rice farmers varies with production scale, (2) the factor-augmenting technical change is labor and chemical saving but seed using, (3) pairwise input substitutions are limited, and (4) factor demands are own-price inelastic. An implication is that Louisiana rice farmers will not appreciably alter their factor utilizations when relative input prices change.

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