The Substitution of Cereal Production Factors: DEA-based Approach

Abstract The elasticities of substitution are derived from the optimal slack variables obtained from the additive models which are based on the DEA method. Measuring the substitutability of cereal production factors in the study area allows us to see the existence of substitutability between the land and other production factors as well as between mechanization and other inputs except the hands artwork. The estimated elasticities of substitution between irrigation water and other inputs allow us to conclude that the irrigation water and labor are substitutable.

Keywords Nonparametric approach, efficiency borders, marginal rate of substitution, elasticities of substitution.

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