Analyzing the Production Structure and Economies of Scale in Iran's Sugar Beet Production

Regards to the importance of sugar beet production in the country, the main objective of this thesis is analyzes the relationships between inputs and economies of scale in Iran’s sugar beet production by using a dual approach. Therefore, after estimating flexible cost functions, Translog cost function is used for estimating coefficients, returns to scale and elasticity of substitution. This function was estimated with cost share equations by seemingly unrelated regressions method for the period of 1368-88. Allen partial elasticity for each pair of inputs shows that fertilizer is substitute by labor and machinery but it’s complement by the land. The results also suggest the existence relationship between land and labor is complementary. Price elasticity of demand showed that the labor is elastic input in sugar beet production process. Moreover, these results revealed that scale economies exists in the sugar beet production in Iran. Accordingly proportionate increase in input using in order to more economical production process is recommended.