STRUCTURAL-CHANGE IN FACTOR DEMAND RELATIONSHIPS IN THE UNITED-STATES FOOD AND KINDRED PRODUCTS INDUSTRY

This analysis utilizes multivariate gradual switching regression techniques and Bayesian inferential procedures to evaluate structural change in factor demand relationships in the food manufacturing industry. Food materials are included as an input into the food manufacturing industry. The results confirm a significant gradual structural change that initiated in 1980. Price elasticities indicate that the demands for raw food materials and energy have become more elastic while the demand for labor has become less elastic. Morishima elasticities of substitution indicate that nearly all factors are substitutes and that the degree of substitutability has significantly increased in recent years.