| Summary: | A study was conducted to examine competing models of input use for two inputs, surface water and land, in central California agriculture. A model of the multiproduct firm was used to compare a fixed input model and a variable input model by means of model specification tests. Data were drawn from a cross-sectional, whole-farm survey of farm operators in central California for the 1988 production year. Findings support the fixed input model for both land and surface water. The finding that surface water is a quantity-rationed input relates to an important water policy issue—implementation of the Central Valley Project Improvement Act. Water rationing has ramifications for three key provisions of the act that concern water price increases, water marketing, and water supply restrictions.
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