Estimation of Price and Substitution Elasticities of Cotton Production Inputs: Empirical Evidence from Baghlan Province, Afghanistan

Document Type : Original Research

Authors
Hafizullah Radmand 1
Ali Keramatzadeh 2
Ramtin Joolaie 2
Farshid Eshraghi 3
1 1. Department of Agricultural Economics, Faculty of Agricultural Management, Gorgan University of Agricultural Science and Natural Resources, Gorgan, Islamic Republic of Iran. 2. Department of Agricultural Economics and Extension, Baghlan University, Baghlan, Afghanistan.
2 Department of Agricultural Economics, Faculty of Agricultural Management, Gorgan University of Agricultural Science and Natural Resources, Gorgan, Islamic Republic of Iran.
3 Department of Agricultural Economics, Faculty of Agriculture, College of Agriculture and Natural Resources, University of Tehran, Karaj, Islamic Republic of Iran.
Abstract
This study aimed to estimate the price and substitution elasticities among the production inputs of cotton in Baghlan Province, Afghanistan. Data were collected through 132 questionnaires, using stratified random sampling from cotton growers in the province. The relationships among production inputs were examined using a translog cost function in conjunction with the Seemingly Unrelated Regression (SUR) approach. The results showed that the price elasticities of demand for land, animal manure, phosphate fertilizer, urea fertilizer, seeds, labor, water, and machinery were -0.036, -0.815, -0.056, -0.050, -0.056, -0.092, -0.074, and -0.198, respectively. All price elasticities of input demand were less than one, indicating inelastic demand, that is, input use is not highly sensitive to price changes. The cross elasticities of demand for inputs were also less than one, confirming inelastic demand across all inputs. The small values of substitution elasticities further indicated that policies targeting a single input would have little impact on the allocation of other inputs. Therefore, it is recommended that policymakers avoid focusing on individual inputs and, instead, consider all inputs as an integrated system when designing agricultural policies.
Keywords
Allen and Morishima elasticities of substitution
Cost function
Demand for inputs
Seemingly Unrelated Regressions (SUR)
Subjects

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Journal of Agricultural Science and Technology
Volume 28, Issue 5
September and October 2026
Pages 1031-1048