A flexible model of factor biased technological change An application to Japanese agriculture

Results indicate that when restrictive assumptions on production structure and parameter constancy are avoided and quality adjusted flow variables employed, an explanation of factor-biased technological change emerges that is consistent with observed patterns of factor use. While substitution possibilities during this period were limited, biol nearly as strong a substitute for labor as for land. Technological change was found to be significantly labor-saving and using in biological inputs and machinery and only weakly land-saving. Descriptions of pre-World War II technology as primarily land-saving miss the significant contribution of labor-saving technology in agricultural transformation and ignore the dynamics of inter-sectoral factor demand.