ME estimation of input and output biases of technical and policy change in UK agriculture, 1953 to 2000.

Maximum entropy (ME) techniques are used to jointly estimate the share equations of a multi-output restricted profit function and the impact of technology and policy biases in post-war UK agriculture. Total factor productivity (TFP) and policy change dummies are included, to take account of technical change and recent CAP reforms. ME provides an attractive means of circumventing estimation difficulties associated with ill-posed or over parameterised specifications. The model provides evidence of factor saving biases for Land, Labour and Feed inputs and output augmentation for Crop and Horticultural products. Recent EU agricultural policy changes appear to have had a significant biasing impact on profit shares. However, early attempts at partial decoupling appear to have fallen short of expectations.