IDEAS home Printed from https://ideas.repec.org/a/bla/canjag/v57y2009i1p139-157.html
   My bibliography  Save this article

A Dynamic Approach to Estimating and Testing Separability in U.S. Demand for Imported and Domestic Meats

Author

Listed:
  • Tullaya Boonsaeng
  • Michael K. Wohlgenant

Abstract

The paper develops dynamic model of demand for domestic and imported meats and compares the performance of the dynamic model called the general AIDS error correction model (GAECM) with the static linear approximate almost ideal demand system (LA/AIDS) model. A test for separability is developed based on the long‐run solution to the dynamic model. The results indicate rejection of the static model in favor of the dynamic model. Homogeneity and symmetry are shown to hold for the dynamic model but are strongly rejected for the static model. Finally, separability between domestic and imported meats is rejected for all models at the 5% level of significance. However, the results of the dynamic model based on the corrected likelihood test with a low p‐value (p= 0.038) indicate that rejection of separability is borderline. Le présent article porte sur l'élaboration d'un modèle dynamique de la demande de viandes produites au pays et de viandes importées, et compare la performance du modèle dynamique appelé modèle général de correction d'erreur AIDS avec le modèle statique LA/AIDS. Un test de séparabilité est élaboré d'après la solution à long terme du modèle dynamique. Les résultats indiquent le rejet du modèle statique en faveur du modèle dynamique. L'homogénéité et la symétrie sont valables pour le modèle dynamique, mais sont fortement rejetées dans le cas du modèle statique. Finalement, la séparabilité entre les viandes produites au pays et les viandes importées est rejetée pour tous les modèles à un seuil de signification de 5 p. 100. Cependant, les résultats du modèle dynamique, fondés sur la correction du test du rapport des vraisemblances avec une faible valeur p (p = 0,038), indiquent que le rejet de la séparabilité se situe à la limite.

Suggested Citation

  • Tullaya Boonsaeng & Michael K. Wohlgenant, 2009. "A Dynamic Approach to Estimating and Testing Separability in U.S. Demand for Imported and Domestic Meats," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(1), pages 139-157, March.
  • Handle: RePEc:bla:canjag:v:57:y:2009:i:1:p:139-157
    DOI: 10.1111/j.1744-7976.2008.01142.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1744-7976.2008.01142.x
    Download Restriction: no

    File URL: https://libkey.io/10.1111/j.1744-7976.2008.01142.x?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. Seungmook Choi & Kim Sosin, 1990. "Testing for Structural Change: The Demand for Meat," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(1), pages 227-236.
    2. Giancarlo Moschini & Karl D. Meilke, 1989. "Modeling the Pattern of Structural Change in U.S. Meat Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(2), pages 253-261.
    3. L Alan Winters, 2015. "Separability And The Specification Of Foreign Trade Functions," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 8, pages 149-173, World Scientific Publishing Co. Pte. Ltd..
    4. Goddard, Ellen W. & Conboy, Paula, 1993. "Optimal International Promotion Expenditure for Differentiated Products," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 61(01), pages 1-13, April.
    5. Holt, Matthew T & Goodwin, Barry K, 1997. "Generalized Habit Formation in an Inverse Almost Ideal Demand System: An Application to Meat Expenditures in the U.S," Empirical Economics, Springer, vol. 22(2), pages 293-320.
    6. Nelson C. Mark & Masao Ogaki & Donggyu Sul, 2005. "Dynamic Seemingly Unrelated Cointegrating Regressions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(3), pages 797-820.
    7. Giancarlo Moschini & Daniele Moro & Richard D. Green, 1994. "Maintaining and Testing Separability in Demand Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(1), pages 61-73.
    8. Blackorby, Charles & Davidson, Russell & Schworm, William, 1991. "Implicit separability: Characterisation and implications for consumer demands," Journal of Economic Theory, Elsevier, vol. 55(2), pages 364-399, December.
    9. Nicholas E. Piggott & Thomas L. Marsh, 2004. "Does Food Safety Information Impact U.S. Meat Demand?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 154-174.
    10. James S. Eales & Laurian J. Unnevehr, 1988. "Demand for Beef and Chicken Products: Separability and Structural Change," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(3), pages 521-532.
    11. Anderson, G J & Blundell, R W, 1982. "Estimation and Hypothesis Testing in Dynamic Singular Equation Systems," Econometrica, Econometric Society, vol. 50(6), pages 1559-1571, November.
    12. Adolf Buse, 1994. "Evaluating the Linearized Almost Ideal Demand System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(4), pages 781-793.
    13. Timothy J. Richards & Pieter. Van Ispelen & Albert Kagan, 1997. "A Two-Stage Analysis of the Effectiveness of Promotion Programs for U.S. Apples," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 825-837.
    14. Blackorby, Charles & Primont, Daniel & Robert Russell, R., 1977. "Separability vs functional structure: A characterization of their differences," Journal of Economic Theory, Elsevier, vol. 15(1), pages 135-144, June.
    15. Julian M. Alston & Colin A. Carter & Richard Green & Daniel Pick, 1990. "Whither Armington Trade Models?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(2), pages 455-467.
    16. Reziti, Ioanna & Ozanne, Adam, 1999. "Testing Regularity Properties in Static and Dynamic Duality Models: The Case of Greek Agriculture," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 26(4), pages 461-477, December.
    17. McGuirk, Anya M. & Driscoll, Paul J. & Alwang, Jeffrey Roger & Huang, Huilin, 1995. "System Misspecification Testing And Structural Change In The Demand For Meats," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(1), pages 1-21, July.
    18. Zijun Wang & David A. Bessler, 2003. "Forecast evaluations in meat demand analysis," Agribusiness, John Wiley & Sons, Ltd., vol. 19(4), pages 505-523.
    19. Blackorby, Charles & Russell, R Robert, 1989. "Will the Real Elasticity of Substitution Please Stand Up? (A Comparison of the Allen/Uzawa and Morishima Elasticities)," American Economic Review, American Economic Association, vol. 79(4), pages 882-888, September.
    20. Winters, L. Alan, 1985. "Separability and the modelling of international economic integration," European Economic Review, Elsevier, vol. 27(3), pages 335-353.
    21. Gordon Anderson & Richard Blundell, 1983. "Testing Restrictions in a Flexible Dynamic Demand System: An Application to Consumers' Expenditure in Canada," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 50(3), pages 397-410.
    22. Rodolfo M. Nayga & Oral Capps, 1994. "Tests of Weak Separability in Disaggregated Meat Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(4), pages 800-808.
    23. Alogoskoufis, George & Smith, Ron, 1991. "On Error Correction Models: Specification, Interpretation, Estimation," Journal of Economic Surveys, Wiley Blackwell, vol. 5(1), pages 97-128.
    24. Ghazi Shukur, 2002. "Dynamic specification and misspecification in systems of demand equations: a testing strategy for model selection," Applied Economics, Taylor & Francis Journals, vol. 34(6), pages 709-725.
    25. Frank Asche & Cathy R. Wessells, 1997. "On Price Indices in the Almost Ideal Demand System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1182-1185.
    26. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    27. Richard Green & Julian M. Alston, 1991. "Elasticities in AIDS Models: A Clarification and Extension," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(3), pages 874-875.
    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. Motallebi, Marzieh & Pendell, Dustin L., 2013. "Estimating an Almost Ideal Demand System Model for Meats in Iran," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150188, Agricultural and Applied Economics Association.
    2. Seale, James L. Jr. & Zhang, Lisha & Traboulsi, Mohamad R., 2013. "Domestic and Foreign Sources of U.S. Demand for Fresh Vegetables and Fruits," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150769, Agricultural and Applied Economics Association.
    3. Dengjun Zhang, 2015. "The trade effect of price risk: a system-wide approach," Empirical Economics, Springer, vol. 48(3), pages 1149-1167, May.

    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. Boonsaeng, Tullaya & Wohlgenant, Michael K., 2006. "Testing Separability between Import and Domestic Commodities: Application to U.S. Meat Demand in a Dynamic Model," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35267, Southern Agricultural Economics Association.
    2. Karagiannis, G. & Katranidis, S. & Velentzas, K., 2000. "An error correction almost ideal demand system for meat in Greece," Agricultural Economics, Blackwell, vol. 22(1), pages 29-35, January.
    3. Wildner, Susanne, 2001. "Quantifizierung der Preis– und Ausgabenelastizitäten für Nahrungsmittel in Deutschland: Schätzung eines LA/AIDS," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 50(05), pages 1-11.
    4. Hassan, Daniel & Monier-Dilhan, Sylvette, 2009. "Mesure des changements de consommation suite à une segmentation de l’offre : l’exemple de la tomate fraîche," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 90(3).
    5. Yeboah, Godfred & Maynard, Leigh J., 2004. "The Impact Of Bse, Fmd, And U.S. Export Promotion Expenditures On Japanese Meat Demand," 2004 Annual meeting, August 1-4, Denver, CO 19978, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. De Zhou & Xiaohua Yu & Thomas Herzfeld, 2015. "Dynamic food demand in urban China," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 7(1), pages 27-44, February.
    7. William A. Barnett & Isaac Kalonda Kanyama, 2013. "Time-varying parameters in the almost ideal demand system and the Rotterdam model: will the best specification please stand up?," Applied Economics, Taylor & Francis Journals, vol. 45(29), pages 4169-4183, October.
    8. Pablo del Río & Desiderio Romero & Marta Jorge & Mercedes Burguillo, 2012. "Territorial differences for transport fuel demand in Spain: an econometric study," Chapters, in: Larry Kreiser & Ana Yábar Sterling & Pedro Herrera & Janet E. Milne & Hope Ashiabor (ed.), Green Taxation and Environmental Sustainability, chapter 4, pages 56-68, Edward Elgar Publishing.
    9. Wen S. Chern & Kimiko Ishibashi & Kiyoshi Taniguchi & Yuki Tokoyama, 2002. "Analysis of Food Consumption Behavior by Japanese Households," Working Papers 02-06, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    10. Sulgham, Anil K. & Zapata, Hector O., 2006. "A Dynamic Approach to Estimate Theoretically Consistent US Meat Demand System," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35441, Southern Agricultural Economics Association.
    11. T. Kesavan & Zuhair A. Hassan & Helen H. Jensen & Stanley R. Johnson, 1993. "Dynamics and Long-run Structure in U.S. Meat Demand," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 41(2), pages 139-153, July.
    12. Arvid Raknerud & Terje Skjerpen & Anders Swensen, 2007. "A linear demand system within a seemingly unrelated time series equations framework," Empirical Economics, Springer, vol. 32(1), pages 105-124, April.
    13. William A. Barnett & Isaac Kalonda Kanyama, 2013. "Time-varying parameters in the almost ideal demand system and the Rotterdam model: will the best specification please stand up?," Applied Economics, Taylor & Francis Journals, vol. 45(29), pages 4169-4183, October.
    14. Chia-Lin Chang & Thanchanok Khamkaew & Michael McAleer, 2010. "Estimating Price Effects in an Almost Ideal Demand Model of Outbound Thai Tourism to East Asia," Working Papers in Economics 10/11, University of Canterbury, Department of Economics and Finance.
    15. Chang, Hui-Shung (Christie), 2000. "An econometric analysis of the competitive position of Australian cotton in the Japanese market," Working Papers 12940, University of New England, School of Economics.
    16. Diansheng Dong & Christopher G. Davis & Hayden Stewart, 2015. "The quantity and variety of households’ meat purchases: A censored demand system approach," Agricultural Economics, International Association of Agricultural Economists, vol. 46(1), pages 99-112, January.
    17. Richards, Timothy J. & Kagan, Albert & Gao, Xiaoming, 1997. "Factors Influencing Changes In Potato And Potato Substitute Demand," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 26(1), pages 1-15, April.
    18. Davis, George C., 2001. "Confirmation And Falsification Of Equilibrium Displacement Models," 2001 Annual meeting, August 5-8, Chicago, IL 20525, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. Susanto, Dwi & Rosson, C. Parr, III & Henneberry, Shida Rastegari, 2008. "The Structure of U.S. Red Meat and Livestock Imports," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6824, Southern Agricultural Economics Association.
    20. Karel Janda & Jill J. McCluskey & Gordon C. Rausser, 2000. "Food Import Demand in the Czech Republic," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(1), pages 22-44, January.

    More about this item

    Statistics

    Access and download statistics

    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:bla:canjag:v:57:y:2009:i:1:p:139-157. 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: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/caefmea.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.