Mathematical modelling and Economic Evaluation

Abstract

In small developing cotmtries many significant agroindustrial projects are not marginal. Therefore a model is proposed that includes all the main components of the sector. This model can be used to evaluate new projects, policies, to test the prevailing degree of market imperfection in the sector and in general to provide a better understanding of the sector so that the economic agents in it can increase their efficiency. This approach is based on Samuelson’s proof that a spatial partial equilibrium system can be converted into a maximization problem. The approach is exemplified by a model of the chilean wheat sector in 1978.