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Decomposition Analysis of Factor Cost Shares: The Case of Greek Agriculture

Published online by Cambridge University Press:  28 April 2015

Giannis Karagiannis ,
Stelios Katranidis  and
Kostas Velentzas
Giannis Karagiannis
Affiliation:
Foundation of Economic and Industrial Research
Stelios Katranidis
Affiliation:
Department of Economics, University of Macedonia, Thessaloniki, Greece
Kostas Velentzas
Affiliation:
Department of Economics, University of Macedonia, Thessaloniki, Greece
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Abstract

An alternative version of decomposition analysis, based on factor cost shares rather than input demand functions, is presented and applied to Greek agriculture. Decomposition analysis shows that most of the changes in factor cost shares during the period from 1973 to 1989 are attributed to technical change and factor substitution, while the role of the scale effect is small, except that of fertilizer. The decomposition analysis results are then used to analyze the implications of Greece's fertilizer and feed subsidy removal, which took place in 1990.

Keywords

decomposition analysisfactor cost sharesGreek agriculture
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 28 , Issue 2 , December 1996 , pp. 369 - 379
Copyright
Copyright © Southern Agricultural Economics Association 1996

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