The Characteristics of Technological Change in Rice Production in Korea

Abstract

In general, technical progress is regarded as the most important factor in economic growth. However, in reality, many economic phenomena are influenced by technical change biases in addition to technical level. The purpose of this paper is to empirically explore elasticities of substitution and technical change biases among factors of rice production in Korea. The main characteristic of Korean agriculture is land- and labor-intensive using. Hence the result of estimating elasticities of substitution and technical change biases may show a different result from the U.S. agriculture. The result of Allen elasticities and technological change biases shows that the demand for labor will be decreased if the price of land is increased and increase in wages will cause increase in the use of machinery and fertilizer. It also shows that if the price of machinery increases, the use of fertilizer will be increased.

In general, technical progress is regarded as the most important factor in economic growth. However, in reality, many economic phenomena are influenced by technical change biases in addition to technical level. The purpose of this paper is to empirically explore elasticities of substitution and technical change biases among factors of rice production in Korea. The main characteristic of Korean agriculture is land- and labor-intensive using. Hence the result of estimating elasticities of substitution and technical change biases may show a different result from the U.S. agriculture. The result of Allen elasticities and technological change biases shows that the demand for labor will be decreased if the price of land is increased and increase in wages will cause increase in the use of machinery and fertilizer. It also shows that if the price of machinery increases, the use of fertilizer will be increased.