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Abstract
Optimal intertemporal investment behaviour ofAustralian pastoralists is modelled using
panel data for the period 1979–1993.Results indicate that quasi-fixity of inputs of labour,
capital, sheep numbers and cattle numbers is characteristic of production in the pastoral
region. It takes about two years for labour, four years for capital and a little over two years
for both sheep numbers and cattle numbers to adjust towards long-run optimal levels.
Results also indicate that, after accounting for adjustment costs, own-price product
supply and input demand responses are inelastic in both the short and long run.