A Model of the U. S. Apple Industry: A Quadratic Interregional Intertemporal Activity Analysis Formulation

Abstract

An in-depth analysis of the U. S. apple industry and its problems requires simultaneous consideration of its multiple dimensions of space, time, resources, commodities, production activities, and marketing levels. An empirical model incorporating these dimensions is constructed and its use for policy analysis is demonstrated by measuring the impact of alternative size reductions in regional apple marketings on Lo.b. level industry and regional net returns. The model could also be used in determining the ramifications of changes in consumer demand, transportation costs, and marketing margins on such factors as production, prices, and interregional Hows.

The Takayama‐judge Model of Spatial Equilibrium Extended to Convex Production Sets

“…The Takayama-Judge model has later been used extensively in regional model-building. For example, it has been employed to model the U.S. apple industry [Fuchs, Farrish, and Bohall (1974)], and to study the welfare effects of erosion controls, banning pesticides, and limiting fertilizer application in the cornbelt [Taylor and Frohberg (1977)]. Applications outside agriculture include a study of the regional production of electricity in the U.S. [Uri (1976)], and a study of world oil market prices [Kennedy (1974)l. It is important to remember that the Takayama-Judge model is one of partial equilibrium only.…”

“…The Takayama-Judge model has been extended and developed in several directions, including multiperiod investigations [Fuchs, Farrish, and Bohall (1974), Martin and Zwart (1975)], and studies of disequilibrium [Taylor and *Senior Research Fellow, Institute for Constructive Capitalism, Graduate School of Business, 'Samuelson called the same concept "net social pay-off' (1952).…”