Measuring Factor Biased Technological Change in Greek Agriculture

This paper uses time series data for the period 1961-1995 and a flexible model to analyze the progress of factor-biased technological change in Greek agriculture. The model employs a third-order transcendental logarithmic cost function which allows the second-order coefficients to change over time. The empirical results show that the hypothesis of non-homotheticity is not rejected implying the existence of a scale effect. The direction of technological change is characterized as labor-saving, capital-using, manufactured inputs-using, other intermediate inputs-saving, and land-neutral. The results also suggest that the overall biased technological change and factor substitution effects contributed to a greater extent in the changes of factor cost shares when compared to the contribution of scale effects.