Ordinary least squares and seemingly unrelated regression procedures were used to
the impacts of changes in rice prices and production costs on U.S. rice planted acreage.
and regional response models were estimated over the 1970-92 period. Supply-inducing
rice were estimated as a function of effective rice support prices and seasonal average
Expected production costs per acre were estimated using lagged actual total variable
expenses per acre adjusted by the previous 3-year average annual change in variable
Estimated short-run price and production cost elasticities were found to be inelastic
at the national
level. However, the magnitude of the production cost elasticities were found to be
greater than the
price elasticities. Estimated long-run elasticities at the U.S. level were inelastic
for changes in price
but elastic for changes in production costs. Although acreage response varied across
similar relationships were found between price and production cost elasticities.