OUR BROAD GOAL IN THIS PROJECT IS (1) TO DERIVE NEW AND IMPROVED MEASURES OF INPUTS, OUTPUTS, AND PRODUCTIVITY IN U.S. AGRICULTURE, BY EXPLICITLY TREATING THE BIOLOGICAL STOCK OF TREES AND VINES AS PART OF THE CAPITAL STOCK, AND (2) TO EXPLORE THE IMPLICATIONS OF THESE NEW MEASURES. MORE SPECIFICALLY, FIRST, WE WILL DEVISE AND DEVELOP NEW MEASURES OF CAPITAL INPUT THAT EXPLICITLY INCORPORATE BIOLOGICAL CAPITAL IN THE FORM OF LIVING TREES AND VINES AND THE ASSOCIATED PHYSICAL CAPITAL OF TRELLISES AND IRRIGATION EQUIPMENT USED IN PERENNIAL CROP PRODUCTION IN TWO STATES: CALIFORNIA AND MINNESOTA. SECOND, WE WILL INCORPORATE THESE NEW MEASURES OF CAPITAL INPUT INTO EXISTING AGRICULTURAL PRODUCTIVITY DATA, COMPARE THE NEW MEASURES WITH PRE-EXISTING MEASURES, AND DRAW INFERENCES FOR UNDERSTANDING PAST AND PROSPECTIVE PATTERNS OF INPUT USE, PRODUCTION, AND PRODUCTIVITY. A CHANGED UNDERSTANDING OF THESE RELATIONSHIPS MAY HAVE IMPORTANT IMPLICATIONS FOR BROADER UNDERSTANDING OF THE ECONOMICS OF AGRICULTURE. IMPROVED DATA WILL ALSO BE VALUABLE FOR SUBSEQUENT STUDIES. IN ADDITION, THIS EXPLORATORY STUDY WILL LAY THE FOUNDATION FOR EXTENDING THE APPROACH TO OTHER STATES AND CORRECTING THE NATIONAL MEASURES IF THE FINDINGS INDICATE DOING SO WOULD BE JUSTIFIED.