Abstract

The purpose of this study was to determine the gross margin and price, cross and morishima technical substitution elasticities for the cost inputs which play a key role in the milk produced in enterprises making animal insurance (Group I) and not making animal insurance (Group II), such as labour, feed, health and energy in Turhal district of Tokat province in Turkey. Model solutions were performed with Seemingly Unrelated Regression (SUR), using Translog production function. In enterprises Group I, own price elasticities of labour, feed, health and energy were estimated from the inputs demand model as -0.344, -0.247, -0.312 and -0.309, respectively. In enterprises Group II also own price elasticities of labour, feed, health and energy were estimated from the inputs demand model as -0.184, -0.197, -0.989 and -0.607, respectively. In addition, the gross margin calculated for the enterprises Group I was found to be more than three times as high as the ones calculated for the enterprises of Group II.

Key words: Translog function, cost, demand, milk, Turkey.