Determining Capital Rate of Return in Sub-agricultural Sectors of Iran

Capital is one of the most limited inputs in agriculture of Iran, which impacts creating value added process. Capital rate of return is an index of capital productivity, therefore, in this paper, capital rate of return in sub agricultural sectors by use of capital stock time series during 1959-2005 and production function technique was determined. Results show that the best form of production function for Agronomy and Horticultural sub sectors is Cobb-Douglas, for Husbandry sub sector is Transcendental and for Fishery and Forestry sub sectors is Cobb-Douglas. Results also show that average capital rate of return in Agronomy and Horticultural sub sectors, Husbandry sub sector, Forestry and Fishery sub sectors is 1.7, 3.8, 0.42 and 0.21 respectively.