Date of Award:

5-1947

Document Type:

Thesis

Degree Name:

Master of Science (MS)

Department:

Applied Economics

Department name when degree awarded

Agricultural Economics

Committee Chair(s)

George T. Blanch

Committee

George T. Blanch

Committee

Harold R. Hochmuth

Committee

W. P. Thomas

Abstract

As agricultural leaders become increasingly aware of the economics involved in the production and marketing of agricultural products, there develops an increased need for more accurate and more complete methods of measuring agricultural production. This need is not only for the satisfactory measurement of the physical production of a given crop, but is also for a unit of measurement that will make possible a comparison of the production of individual enterprises and groups of enterprises for a given year and from year to year. Because the production of many crops, and livestock and livestock products are customarily measured according to different standards, some in tons, some in bushels, and some in pounds, and also because a given unit of all agricultural products is not of equal significance--a pound of hay and a pound of butterfat for example--the usual measures do not provide a satisfactory basis for comparing the production of different products or groups of products. Some other means of measurement must be used whereby all physical production can be reduced to a common unit of measurement or a common denominator. Modern economists and statisticians are now using the index number as that common denominator.

The index number may be defined as a statistical device for measuring changes in groups of data. Edmund E. Day (5) defines the index number as "A number designed to express the relative changes or differences of a group of related variables." Frank A. Pearson (11) defines the index number as "A comparative measure of magnitude, and a ratio of the magnitude of a variable at one time, place, or position to its magnitude at another."

This method of measurement may be applied to many general phenomena such as prices, quantity of production, yield, quantity exported, and group health. Comparisons of the production or price of a given commodity at one time with that of another time are made by relating both to a common basis as in the calculation of percentages. The results are multiplied by 100 to make them whole numbers. These are often called "relatives".1/ By the process of calculating either simple or weighted averages of these relatives, it is possible to obtain a simple measure of the changes in a large number of constantly varying items.

The first and most important use of index numbers as a measure of yields and total agricultural production in the state is as an aid to research workers in the field of agricultural economics. It is particularly valuable when the research is directed toward the formulation of long-time agricultural plans and programs. All commodity index numbers of yield and production can be used to show secular trends, cyclical movements, and influences that various factors, such as weather, have on production in this state. These indexes are also valuable as aids in teaching both in the classroom and in the program of the Extension Service of the Utah State Agricultural College.

For the past several years, there has not been an up-to-date index of crop yields or an index of total agricultural production for the state of Utah. Such indexes had been constructed for the period 1920 to 1938, but generally accepted changes in the years used as the base period, addition and changes in basic data, and failure to keep indexes up-to-date have made them inadequate for use at the present time.

The objective of this study then is first, to develop improved methods and techniques for constructing indexes of crop yields per acre and total agricultural production; and second, to calculate these indexes for Utah from 1920 to 1946.

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