Allocatable Fixed Inputs and Jointness in Agricultural Production: Implications For Economic Modeling: Comment

Abstract

Some of the most challenging production economic concepts are those of interdependence and as pertaining to the products in a multiproduct firm. Thus, Shumway, Pope, and Nash should be applauded for their attempt to clarify these notions. However, their contention that allocatable fixed inputs can lead to jointness has mainly added to the confusion. It is demonstrated here that jointness, as traditionally represented, exists only with nonallocatable inputs, in direct contrast to what is suggested by Shumway, Pope, and Nash. This paper favors the jointness concepts from Carlson and Lau and suggests another kind of jointness based on Shumway, Pope, and Nash. Carlson's classic book still represents one of the most concise statements about the reasons for, and the character of, multiproduct firms and jointness. Carlson saw jointness as the primary reason for the existence of the multiproduct firm. As shown below, Carlson made the key points: (a) technical product complementarity may induce jointness; (b) all joint production, which arises from jointness, has the feature of being technically interdependent, whether of the complementary or competitive variety; and (c) over some ranges of multiproduct production, there could actually be technical independence. Seemingly, because of this last feature, we could find multiproduct firms without jointness in their technologies. However, Carlson would likely have argued that this situation does not occur bcause multiproduct firms are due to the lower costs under technically complementary products, or simply because the products can not be separated for the technically competitive case. The raison d'etre of the multiproduct firm rests in the jointness.