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- Supply Response of Corn to Price in the Philippines, 1957-1974
Supply Response of Corn to Price in the Philippines, 1957-1974
Thesis Abstract:
The study involved a test of major hypothesis about the economic behavior of Philippine corn producers. Supply response functions were estimated to test whether corn producers respond rationally, in terms of quantity produced and area planted, to changes in the price of corn in realtion to alternative crops.
Based on simple regression maodels, the short0turn price elasticities of sorn hectarage on the regional level ranged from as low as 0.64 in Ilocos to as high as 1.07 in Eastern Visayas. On the other hand, price elasticities of output ranged from 0.87 to 1.14. However, price elasticities of corn output and area planted for the Philippines wre way below the regional response, 0.24 and 0.17, respectively.
Besides corn ptice , other important economic variables influenced corn production and hectarage in the Philippines. In most of the regions studied, competition of corn with other crops seemed to be crop-specific, as shown by the varying effects on corn production on increases in the price of sugar, coconut or rice.
Results of dummy variable indicated the effect of new roads as beong psitively related to corn production and hectarage. The study also showed that yield per hectare was positively related to corn output. It reflected thet trends and presumably captured the systematic improvement in seeds, fertilizers and cultivation techniques which contributed to increased corn yield.
Despite the failure to obatin good price response owing to inadequate data, Philippine corn farmers generally tended to respond retinally to price and other economic variables.