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Price and non-price
determinants of farm household demand for purchased inputs:
Evidence from Northern Ghana
Akwasi Mensah-Bonsu
Department of Agricultural Economics and Agribusiness,
University of Ghana
Legon,
Ghana. E-mail:
ambonsu@ug.edu.gh,
mensah_bonsu@yahoo.com.
Tel:
+233-24-4768353; +233-26-6414906.
Accepted
5 January 2010 |
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The
study examined the factors that influence the use of
purchased inputs (fertilizer, hired labour, seed and
ploughing services) by smallholders in Northern Ghana. The
seemingly unrelated regression technique was used to
estimate a system of cost share equations of the factor
inputs. The elasticities of substitution and factor demand
have been estimated. The estimated results suggested that
higher amount of remittance received and the attainment of
basic education significantly led to higher fertilizer
expenditure, suggesting that credit and basic education
programmes were important for increasing expenditure on
production enhancing inputs like fertilizer. The own-price
elasticities of demand for the inputs were significant and
had the expected negative signs. The demand for seed and
ploughing services were quite price inelastic, while the
demand for fertilizer and hired labour were price elastic.
The estimated own-price elasticities of demand for
fertilizer and hired labour indicated substantial high
degrees of price responsiveness of farmers for them. The
estimated cross-price elasticities suggested that
smallholders would substitute relatively more hired labour
for fertilizer, if the relative price of fertilizer to hired
labour is increased.
Key
words: Purchased inputs, cost shares, elasticities,
smallholders, Northern Ghana. |
