Wheat production function analysis using panel data

The paper focuses on the analysis of wheat production function. The significance of classical production factors as well as climate and fertilizer factors was tested. The analysis consists on application of classical Cobb-Douglas production function and its comparison to the constant elasticity of substitution (CES) production function. First, Kmenta's linear approximation to the 2-input CES function was applied and afterwards also the Taylor n-input linear approximation was used and tested. The parameters of production function were estimated using available panel data from 14 Czech regions in the period from 2000 to 2009 by OLS and GLS methods - depending on the form of individual effects used in the model. The convenience of the application of fixed or random individual effects was tested and discussed. One of the conclusions from the analysis is the ascertainment that the Cobb-Douglas production function is not applicable to agricultural plant products - especially wheat.