1. In recent years, the actual and potential capacities of national agencies to undertake quantitative analyses of the impacts of various economic options have substantially increased. Various factors have contributed to this increased capacity. Among the important ones are:
(1) The increase in the pool of economists who are oriented towards quantitative analysis.
(2) The increasing ease of accessibility to the diverse mathematical economics literature.
(3) The availability of users-friendly software's in micro-computers.
2. Due to the pivotal role of price policy instruments in redirecting resource allocation and distribution; in providing benefits to particular sectors of the economy; and in generating exportable surplus, a premium is continually being attached by policy-makers to quantified estimates of the impacts of price changes. For example, governments are interested in the impact of changes in the price of beef on animal offtake levels because an excessive cattle herd size will exert pressure on communal grazing areas. Past studies in Africa provide a mixed result about the reaction of subsistence cattle producers to beef price adjustments. Quantitative estimates by Doran, Low, and Kemp (1979) and Rodriguez (1985) showed cattle herds in communal areas in Swaziland and Zimbabwe respectively will increase further as a result of beef price increases. One reason for the rise in herd inventories is that the increase in the price of beef results in a higher-cash value per animal unit. Hence, the subsistence-oriented livestock producers will sell less animals to meet their minimum money transaction demand. Khalifa and Simpson (1972) indicated a decline in animal inventories in Sudan as a result of increases in the price of beef. This can be attributed to the income effects of the larger cash generated in selling more higher priced animals. As the nomadic producer increases his cash income, his other demand for money (e.g. speculative motive in the form of gold ornament purchases) comes into play.
3. The objectives of this paper are:
(1) To illustrate the role of supply price elasticities in policy making and analysis.
(2) To document our experience with respect to the sensitiveness (in terms of signs and absolute magnitudes) of beef supply price elasticities estimated for commercial farms in Zimbabwe and the corresponding policy implications.
Zimbabwe was selected as the case study because of the substantial role of price policy in shaping its livestock market structure.
