engleski

Analysis of cattle production in Osijek-Baranja County using the Cobb-Douglas model

Local development is inconceivable without investment in the creation of new value. This process means an increase in production of goods and services, with simultaneous structural transformations and changes in the functioning of the local economy. The purpose of this study was to, through Cobb-Douglas's function, calculate the value of cattle production in Osijek-Baranja County, that is to show the relationship between a certain amount of labour and capital. Based on performed analysis it could be concluded that Cobb- Douglas's model of production value calculation is applicable in practice. Also, labour productivity and technological capital have been demonstrated as two parameters that affect the volume of production and by different combinations of these two parameters the volume of production can be changed. Generally speaking, it is necessary to focus on cost reduction. In this case, the Osijek-Baranja County has a lower opportunity cost in cattle production compared to other counties in the Republic of Croatia. With this, lower costs and specialization of production have a relative advantage over the competition. Greater labour costs reduce production volume and move production to other areas where the wages are lower. But also, low labour costs, although increasing the volume of production, have a disincentive effect on the labour supply, or stimulate the migration of working-age people into areas where wages are higher.

cattle production; Cobb-Douglas function; labour productivity; capital

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