IDEAS home Printed from https://ideas.repec.org/a/ags/jlaare/30866.html
   My bibliography  Save this article

Demand For Herbicide In Corn: An Entropy Approach Using Micro-Level Data

Author

Listed:
  • Arndt, Channing

Abstract

Price responsiveness of herbicide demand in corn for farmers in Indiana's White River Basin using cross-section data from individual farms is estimated. Particular attention is paid to appropriate treatment of binding nonnegativity constraints. Estimation was first attempted using an approach to demand systems estimation suggested by Lee and Pitt. However, analytical and computational difficulties effectively preclude estimation by the Lee and Pitt approach. As an alternative, a maximum entropy (ME) approach is presented and discussed. Results from the ME estimator tentatively indicate limited response of herbicide demand to changes in own prices. The maximum entropy approach to demand systems estimation appears to have merit and warrants further attention.

Suggested Citation

  • Arndt, Channing, 1999. "Demand For Herbicide In Corn: An Entropy Approach Using Micro-Level Data," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(1), pages 1-18, July.
    • Handle: RePEc:ags:jlaare:30866
    DOI: 10.22004/ag.econ.30866
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/30866/files/24010204.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.30866?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Wales, T. J. & Woodland, A. D., 1983. "Estimation of consumer demand systems with binding non-negativity constraints," Journal of Econometrics, Elsevier, vol. 21(3), pages 263-285, April.
    2. Soest, Arthur van & Kapteyn, Arie & Kooreman, Peter, 1993. "Coherency and regularity of demand systems with equality and inequality constraints," Journal of Econometrics, Elsevier, vol. 57(1-3), pages 161-188.
    3. J. Scott Shonkwiler & Steven T. Yen, 1999. "Two-Step Estimation of a Censored System of Equations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 972-982.
    4. Stoker, Thomas M, 1993. "Empirical Approaches to the Problem of Aggregation Over Individuals," Journal of Economic Literature, American Economic Association, vol. 31(4), pages 1827-1874, December.
    5. Rasmus Heltberg & Thomas Channing Arndt & Nagothu Udaya Sekhar, 2000. "Fuelwood Consumption and Forest Degradation: A Household Model for Domestic Energy Substitution in Rural India," Land Economics, University of Wisconsin Press, vol. 76(2), pages 213-232.
    6. Heien, Dale & Wessells, Cathy Roheim, 1990. "Demand Systems Estimation with Microdata: A Censored Regression Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 8(3), pages 365-371, July.
    7. Heien, Dale & Durham, Cathy, 1991. "A Test of the Habit Formation Hypothesis Using Household Data," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 189-199, May.
    8. Golan, Amos & Judge, George & Robinson, Sherman, 1994. "Recovering Information from Incomplete or Partial Multisectoral Economic Data," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 541-549, August.
    9. Neary, J. P. & Roberts, K. W. S., 1980. "The theory of household behaviour under rationing," European Economic Review, Elsevier, vol. 13(1), pages 25-42, January.
    10. Preckel, Paul V., 1998. "Least Squares And Entropy As Penalty Functions," Staff Papers 28625, Purdue University, Department of Agricultural Economics.
    11. Van Soest, Arthur & Kooreman, Peter, 1990. "Coherency of the indirect translog demand system with binding nonnegativity constraints," Journal of Econometrics, Elsevier, vol. 44(3), pages 391-400, June.
    12. Terrell, Dek, 1996. "Incorporating Monotonicity and Concavity Conditions in Flexible Functional Forms," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(2), pages 179-194, March-Apr.
    13. Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275, January.
    14. Golan, Amos & Judge, George G. & Miller, Douglas, 1996. "Maximum Entropy Econometrics," Staff General Research Papers Archive 1488, Iowa State University, Department of Economics.
    15. Lee, Lung-Fei & Pitt, Mark M, 1986. "Microeconometric Demand Systems with Binding Nonnegativity Constraints: The Dual Approach," Econometrica, Econometric Society, vol. 54(5), pages 1237-1242, September.
    16. Golan, Amos & Judge, G. & Miller, D., 1997. "The Maximum Entropy Approach to Estimation and Inference: An Overview," Staff General Research Papers Archive 1327, Iowa State University, Department of Economics.
    17. Lee, Lung-Fei & Pitt, Mark M., 1987. "Microeconometric models of rationing, imperfect markets, and non-negativity constraints," Journal of Econometrics, Elsevier, vol. 36(1-2), pages 89-110.
    18. Quirino Paris & Richard E. Howitt, 1998. "An Analysis of Ill-Posed Production Problems Using Maximum Entropy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 124-138.
    19. Golan, Amos & Judge, George & Karp, Larry, 1996. "A maximum entropy approach to estimation and inference in dynamic models or Counting fish in the sea using maximum entropy," Journal of Economic Dynamics and Control, Elsevier, vol. 20(4), pages 559-582, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Meyerhoefer, Chad D. & Ranney, Christine K. & Sahn, David E., 2004. "Consistent Estimation Of Longitudinal Censored Demand Systems," 2004 Annual meeting, August 1-4, Denver, CO 19992, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Adélaïde Fadhuile & Stéphane Lemarié & Alain Pirotte, 2016. "Disaggregating the Demand for Pesticides: Does it Matter?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 64(2), pages 223-252, June.
    3. Obafèmi P Koutchadé & Alain Carpentier & Fabienne Femenia, 2020. "Modeling Corners, Kinks, and Jumps in Crop Acreage Choices: Impacts of the EU Support to Protein Crops," Post-Print hal-04665916, HAL.
    4. Fadhuile, Adelaide & Lemarie, Stephane & Pirotte, Alain, 2011. "Pesticides Uses in Crop Production: What Can We Learn from French Farmers Practices?," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103654, Agricultural and Applied Economics Association.
    5. Xiaonan Liu & Jeffrey T. LaFrance & Hayley H. Chouinard & Thomas L. Marsh, 2013. "A Generalized Utility Model with Binding Non-Negativity Constraints: Demand for Beer," 2013 Papers pli830, Job Market Papers.
    6. Zheng, Yu & Alexandre, Gohin, 2018. "Agricultural productivity and price volatility in France: a dynamic stochastic partial equilibrium approach," 2018 Annual Meeting, August 5-7, Washington, D.C. 274354, Agricultural and Applied Economics Association.
    7. Raja Chakir & Alban Thomas, 2020. "Unintended consequences of environmental policies: the case of set-aside and agricultural intensification," Working Papers hal-02482207, HAL.
    8. Millimet, Daniel L. & Tchernis, Rusty, 2008. "Estimating high-dimensional demand systems in the presence of many binding non-negativity constraints," Journal of Econometrics, Elsevier, vol. 147(2), pages 384-395, December.
    9. Obafèmi P. Koutchadé & Alain Carpentier & Fabienne Femenia, 2021. "Modeling Corners, Kinks, and Jumps in Crop Acreage Choices: Impacts of the EU Support to Protein Crops," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(4), pages 1502-1524, August.
    10. Golan, Amos & LaFrance, Jeffrey T & Perloff, Jeffrey M. & Seabold, Skipper, 2017. "Estimating a Demand System with Choke Prices," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt4qt9q8vr, Department of Agricultural & Resource Economics, UC Berkeley.
    11. Ou Yang & Peter Sivey & Andrea M. de Silva & Anthony Scott, 2016. "Preschool Children’s Demand for Sugar Sweetened Beverages: Evidence from Stated-Preference Panel Data," Melbourne Institute Working Paper Series wp2016n25, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    12. Meyerhoefer, Chad D. & Ranney, Christine K. & Sahn, David E., 2003. "Consistent Estimation Of Longitudinal Censored Demand Systems: An Application To Transition Country Data," Working Papers 127252, Cornell University, Department of Applied Economics and Management.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Millimet, Daniel L. & Tchernis, Rusty, 2008. "Estimating high-dimensional demand systems in the presence of many binding non-negativity constraints," Journal of Econometrics, Elsevier, vol. 147(2), pages 384-395, December.
    2. Fabienne Femenia & Alexandre Gohin, 2007. "Estimating censored and non homothetic demand systems : the generalized maximum entropy appoach," Post-Print hal-02814735, HAL.
    3. Golan, Amos & LaFrance, Jeffrey T & Perloff, Jeffrey M. & Seabold, Skipper, 2017. "Estimating a Demand System with Choke Prices," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt4qt9q8vr, Department of Agricultural & Resource Economics, UC Berkeley.
    4. Mark M. Pitt & Daniel L. Millimet, 1999. "Estimation of Coherent Demand Systems with Many Binding Non-Negativity Constraints," Working Papers 99-4, Brown University, Department of Economics.
    5. Bousquet, Alain & Ladoux, Norbert, 2006. "Flexible versus designated technologies and interfuel substitution," Energy Economics, Elsevier, vol. 28(4), pages 426-443, July.
    6. Dong, Diansheng & Gould, Brian W. & Kaiser, Harry M., 2002. "The Structure Of Food Demand In Mexico: An Application Of The Amemiya-Tobin Approach To The Estimation Of A Censored System," 2002 Annual meeting, July 28-31, Long Beach, CA 19830, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Raja Chakir & Alain Bousquet & Norbert Ladoux, 2004. "Modeling corner solutions with panel data: Application to the industrial energy demand in France," Empirical Economics, Springer, vol. 29(1), pages 193-208, January.
    8. Zhuo Chen & Steven Yen, 2005. "On bias correction in the multivariate sample-selection model," Applied Economics, Taylor & Francis Journals, vol. 37(21), pages 2459-2468.
    9. Xiaonan Liu & Jeffrey T. LaFrance & Hayley H. Chouinard & Thomas L. Marsh, 2013. "A Generalized Utility Model with Binding Non-Negativity Constraints: Demand for Beer," 2013 Papers pli830, Job Market Papers.
    10. Bousquet, Alain & Ivaldi, Marc, 1998. "An individual choice model of energy mix," Resource and Energy Economics, Elsevier, vol. 20(3), pages 263-286, September.
    11. Meyerhoefer, Chad D. & Ranney, Christine K. & Sahn, David E., 2003. "Consistent Estimation Of Longitudinal Censored Demand Systems: An Application To Transition Country Data," Working Papers 127252, Cornell University, Department of Applied Economics and Management.
    12. Arthur Lewbel & Lars Nesheim, 2019. "Sparse demand systems: corners and complements," Boston College Working Papers in Economics 1005, Boston College Department of Economics.
    13. Chihwa Kao & Lung-fei Lee & Mark M. Pitt, 2001. "Simulated Maximum Likelihood Estimation of the Linear Expenditure System with Binding Non-Negativity Constraints," Annals of Economics and Finance, Society for AEF, vol. 2(1), pages 215-235, May.
    14. Yen, Steven T. & Huang, Chung L., 2002. "Cross-Sectional Estimation Of U.S. Demand For Beef Products: A Censored System Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(2), pages 1-15, December.
    15. Raja Chakir & Alban Thomas, 2003. "Simulated maximum likelihood estimation of demand systems with corner solutions and panel data application to industrial energy demand," Revue d'économie politique, Dalloz, vol. 113(6), pages 773-799.
    16. Gould, Brian W. & Yen, Steven T., 2002. "Food Demand In Mexico: A Quasi-Maximum Likelihood Approach," 2002 Annual meeting, July 28-31, Long Beach, CA 19667, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    17. Msangi, Siwa & Howitt, Richard E., 2006. "Estimating Disaggregate Production Functions: An Application to Northern Mexico," 2006 Annual meeting, July 23-26, Long Beach, CA 21080, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Dong, Diansheng & Kaiser, Harry M., 2003. "Estimation of a Censored AIDS Model: A Simulated Amemiya-Tobin Approach," Research Bulletins 122113, Cornell University, Department of Applied Economics and Management.
    19. Thomas, Alban & Chakir, Raja, 2020. "Unintended consequences of environmental policies: the case of set-aside and agricultural intensification," TSE Working Papers 20-1066, Toulouse School of Economics (TSE).
    20. Vardges Hovhannisyan & Hayk Khachatryan, 2017. "Ornamental Plants in the United States: An Econometric Analysis of a Household‐Level Demand System," Agribusiness, John Wiley & Sons, Ltd., vol. 33(2), pages 226-241, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jlaare:30866. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/waeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.