Publication Date


Series Number

98-WP 193


This paper outlines a new spatial, nonlinear, programming model of the agricultural sector in Denmark. The KRAM model (KVL's Rationalized Agricultural Model) optimizes production functions on a very disaggregated level, allowing for analysis of changes in physical constraints to production, as well as price changes. The model is dynamic, with a time horizon of 10 years. The structural development is determined endogenously using profits and a Markov chain model. The purpose of this paper is to place KRAM in a theoretical framework; future work will address the programming, calibration, and application of KRAM.