ABSTRACT
A cost function approach is used to assess the impact of wheat diversity on the allocative efficiency of wheat production in China. Using this approach enables an examination of the marginal economic cost or benefit of changes in wheat diversity, as well as the identification of its impacts on input allocation. Measures of richness, inverse dominance and evenness are tested for morphological characteristics of wheat varieties in seven key wheat-producing provinces in China from 1982 to 1995. The results of the analysis show that while increased evenness across morphological characteristics increases total costs per hectare, spatial diversity can effectively substitute for specific inputs such as pesticides and labor. Factors determining spatial diversity in named varieties are also identified to provide a clearer understanding of the implications of changing policies relating to those inputs.
