Modelling a multiple output production system : the Australian sheep industry

Despite the fact that joint production is a common characteristic of Australian broadacre agriculture much of the previous empirical research into production decisions in Australian agriculture has not explicitly accounted for multiple output production. In an attempt to extend the existing knowledge in this area a profit function model was used to study production decisions in the Australian sheep industry. Three flexible functional forms were specified. They were the normalised quadratic, the generalised Leontief and the translog forms. The interrelationships which existed between different outputs were accounted for by cross equation restrictions and by using a full information maximum likelihood estimator