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Issues and Strategies for Aggregate Supply Response Estimation for Policy Analyses

Author

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  • Ramirez, Octavio A.
  • Mohanty, Samarendu
  • Carpio, Carlos E.
  • Denning, Megan

Abstract

We demonstrate the use of the small-sample econometrics principles and strategies to come up with reliable yield and acreage models for policy analyses. We focus on demonstrating the importance of proper representation of systematic and random components of the model for improving forecasting precision along with more reliable confidence intervals for the forecasts. A probability distribution function modeling approach, which has been shown to provide more reliable confidence intervals for the dependent variable forecasts than the standard models that assume error term normality, is used to estimate cotton supply response in the Southeastern United States.

Suggested Citation

  • Ramirez, Octavio A. & Mohanty, Samarendu & Carpio, Carlos E. & Denning, Megan, 2004. "Issues and Strategies for Aggregate Supply Response Estimation for Policy Analyses," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 36(2), pages 1-17, August.
    • Handle: RePEc:ags:joaaec:43420
    DOI: 10.22004/ag.econ.43420
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    References listed on IDEAS

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    1. Ramirez, Octavio A. & Fadiga, Mohamadou L., 2003. "Forecasting Agricultural Commodity Prices with Asymmetric-Error GARCH Models," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(01), pages 1-15, April.
    2. Octavio A. Ramirez & Sukant Misra & James Field, 2003. "Crop-Yield Distributions Revisited," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 108-120.
    3. Ramirez, Octavio A. & Somarriba, Eduardo, 2000. "Risk And Returns Of Diversified Cropping Systems Under Nonnormal, Cross-, And Autocorrelated Commodity Price Structures," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-16, December.
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    Cited by:

    1. Capps, Oral, Jr. & Williams, Gary W., 2006. "The Economic Effectiveness of the Cotton Checkoff Program," Reports 90753, Texas A&M University, Agribusiness, Food, and Consumer Economics Research Center.

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    More about this item

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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