ABSTRACT
In macroeconomic analysis, the technology of the economy is summarized by a production function. Yet the production function, strictly speaking, is a microeconomic concept. It has a relatively clear meaning when it specifies a well-defined process, such as the production of a crop under well-defined conditions. But there are many crops and environmental conditions. Consequently, we observe many production functions in agriculture. In order to explicate the meaning of the agricultural production function, we must first consider the issue of aggregation, a subject that has been discussed at length in the literature. The problem of aggregation in agriculture differs from the common aggregation problem, however, in that the set of aggregated functions is endogenous to the economic system.
