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The Stochastic Coefficients Approach to Econometric Modeling Part I: A Critique of Fixed Coefficients Models

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  • Swamy, P.A.V.B.
  • Conway, Roger K.
  • LeBlanc, Michael

Abstract

Stochastic coefficients models can provide accurate agricultural secto forecasts and useful policy analysis Coefficient variation may occur for many reasons including aggregating over micro units, omitting variable, using an incorrect functional form, and allowing for a dynamic economic theory of optimizing behavior In the first article in this series of three, we address the logical problems with fixed coefficients models A number of auxiliary and possibly contradictory assumptions are imposed on econometric models to make them empirically manageable In the seconf and third articles, we will show how stochastic coefficients models eliminate the logical problems associated with fixed coefficients models

Suggested Citation

  • Swamy, P.A.V.B. & Conway, Roger K. & LeBlanc, Michael, 1988. "The Stochastic Coefficients Approach to Econometric Modeling Part I: A Critique of Fixed Coefficients Models," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 40(2), pages 1-9.
    • Handle: RePEc:ags:uersja:137092
    DOI: 10.22004/ag.econ.137092
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    References listed on IDEAS

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    1. Gallant, A Ronald & Holly, Alberto, 1980. "Statistical Inference in an Implicit, Nonlinear, Simultaneous Equation Model in the Context of Maximum Likelihood Estimation," Econometrica, Econometric Society, vol. 48(3), pages 697-720, April.
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