Impacts of R&E Activities on the Production Structure of the Japanese Rice Sector, 1956-92

Abstract

This study investigates the impacts of investment in public research and extension (R & E) activities on the Japanese rice production for the period 1956-92 by estimating the translog total cost function. It was found that the larger the farm size class, the greater the cost-reducing effects and the shadow prices of the R & E capital stock. This finding is consistent with Schultz' hypothesis that larger farms enjoy more benefits from public R & E activities that do smaller farms. Furthermore, changes in the stock of technological knowledge had bias effects toward using machinery and intermediate inputs, and saving labor, land, and other inputs during the 1956-92 period, which is consistent with the Hicksian induced-innovation hypothesis.