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Modeling Long-term Commodities: the Development of a Simulation Model for the South African Wine Industry within a Partial Equilibrium Framework

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Listed:
  • Reynolds, Sanri
  • Meyer, Ferdinand
  • Cutts, Michela
  • Vink, Nick

Abstract

Econometric demand and supply models of agricultural commodities and crops have been around for a long time with extensive research and adaptations being made in the grain and livestock sectors. This much attention has, however, not been afforded to long term commodities. This paper presents a partial equilibrium framework for modeling long term commodities using the South African wine industry as an example. The model structure is presented and two different approaches to closing the model are compared. The usefulness of the model is tested in the form of baseline projections and the analysis of a typical “what if” question. (JEL Classification: D5, L66, Q11)

Suggested Citation

  • Reynolds, Sanri & Meyer, Ferdinand & Cutts, Michela & Vink, Nick, 2009. "Modeling Long-term Commodities: the Development of a Simulation Model for the South African Wine Industry within a Partial Equilibrium Framework," Journal of Wine Economics, Cambridge University Press, vol. 4(2), pages 201-218, January.
    • Handle: RePEc:cup:jwecon:v:4:y:2009:i:02:p:201-218_00
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    References listed on IDEAS

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    1. Babcock, Bruce A. & Beghin, John C. & Fabiosa, Jacinto F. & de Cara, Stephane & Elobeid, Amani E. & Fang, Cheng & Fuller, Frank H. & Hart, Chad E. & Isik, Murat & Matthey, Holger & Saak, Alexander E. , 2002. "FAPRI 2002 World Agricultural Outlook," FAPRI Staff Reports 32051, Food and Agricultural Policy Research Institute (FAPRI).
    2. Lariviere, Eric & Larue, Bruno & Chalfant, Jim, 2000. "Modeling the demand for alcoholic beverages and advertising specifications," Agricultural Economics, Blackwell, vol. 22(2), pages 147-162, March.
    3. Babcock, Bruce A. & Beghin, John C. & Mohanty, Samarendu & Fuller, Frank H. & Fabiosa, Jacinto F. & Kaus, Phillip J. & Fang, Cheng & Hart, Chad E. & Kovarik, Karen & Womack, Abner W. & Young, Robert E, 2000. "FAPRI 2000 World Agricultural Outlook," FAPRI Staff Reports 32045, Food and Agricultural Policy Research Institute (FAPRI).
    4. John L. Baritelle & David W. Price, 1974. "Supply Response and Marketing Strategies for Deciduous Crops," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(2), pages 245-253.
    5. Meyer, Ferdinand H. & Westhoff, Patrick C. & Binfield, Julian C.R. & Kirsten, Johann F., 2006. "Model closure and price formation under switching grain market regimes in South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 45(4), pages 1-12, December.
    6. Beghin, John C. & Dong, Fengxia & Elobeid, Amani & Fabiosa, Jacinto F. & Fuller, Frank H. & Hart, Chad E. & Kovarik, Karen P. & Tokgoz, Simla & Yu, Tun-Hsiang & Wailes, Eric J. & Chavez, Edward & Woma, 2006. "FAPRI 2006 U.S. And World Agricultural Outlook," Staff General Research Papers Archive 12597, Iowa State University, Department of Economics.
      • Beghin, John C. & Dong, Fengxia & Elobeid, Amani E. & Fabiosa, Jacinto F. & Fuller, Frank H. & Hart, Chad E. & Kovarik, Karen & Tokgoz, Simla & Yu, Tun-Hsiang (Edward) & Wailes, Eric J. & Chavez, Eddi, 2006. "FAPRI 2006 U.S. and World Agricultural Outlook," FAPRI Staff Reports 7319, Food and Agricultural Policy Research Institute (FAPRI).
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    Cited by:

    1. Bedek, Željka & Njavro, Mario, 2016. "Risks and Competitiveness in Agriculture with Emphasis on Wine Sector in Croatia," APSTRACT: Applied Studies in Agribusiness and Commerce, AGRIMBA, vol. 10(1), pages 1-8, March.
    2. Strauss, P.G. & Meyer, Ferdinand H. & Kirsten, Johann F., 2008. "Facilitating decision-making in agriculture by using a system of models," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 47(3), pages 1-19, September.

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    More about this item

    JEL classification:

    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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