SOUTHERN JOURNAL OF AGRICULTURAL ECONOMICS DECEMBER, 1978 MEASUREMENT OF ALLOCATIVE BIASES OF PRODUCTION CONTROL POLICIES

Because of growing stocks of grain and the can conclude that resource allocation was reinstitution of production controls, the ques- changed, or "biased, " toward the increased tion of what allocative impacts such controls relative use of various inputs or production of imply is once again relevant. The prospect that various outputs. By quantifying the extent of restrictions on land use may initiate an intens- this bias, one can determine exactly how rela-ification in the use of substitute inputs such as tive utilization or production changed. fertilizer, which are already high in price, is dis- Suppose producers employ a wide variety of couraging. Although the issue is an old one, inputs (X1, X2... Xn) which can be adjusted as empirical evidence on the extent of these ef- desired by purchasing more at market prices fects is incomplete. ' The purpose of this article (r1, r2... rn). Also, suppose producers use is to derive a convenient means of measuring inputs (01, 2... Oq) whose services are fixed or the allocative effects of changes in input re- restricted for any number of reasons: the ab-strictions. As an example of empirical applica- sence of rental markets, lags in adjustments, tion, results are presented which indicate the or government restrictions announced through impact of acreage restrictions during the various regulations. The state of technology