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Assessing the impacts of stochastic trend in crop acreage supply response model

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  • Murali Adhikari
  • Krishna Paudel
  • Jack Houston
  • James Bukenya

Abstract

This paper demonstrates the need to revisit the way a technical change has been incorporated in a crop acreage supply response model. Three different versions of technological change were introduced and compared: no trend, deterministic trend, and stochastic trend. The results confirm the need to treat a technology variable as a stochastic trend for better results in crop acreage supply response model specifications.

Suggested Citation

  • Murali Adhikari & Krishna Paudel & Jack Houston & James Bukenya, 2008. "Assessing the impacts of stochastic trend in crop acreage supply response model," Applied Economics, Taylor & Francis Journals, vol. 40(3), pages 295-302.
    • Handle: RePEc:taf:applec:v:40:y:2008:i:3:p:295-302
    DOI: 10.1080/00036840500461881
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    References listed on IDEAS

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    1. Liam Lenten & Imad Moosa, 1999. "Modelling the trend and seasonality in the consumption of alcoholic beverages in the United Kingdom," Applied Economics, Taylor & Francis Journals, vol. 31(7), pages 795-804.
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    4. Yin-Wong Cheung & Frank Westermann, 2002. "Output dynamics of the G7 countries--stochastic trends and cyclical movements," Applied Economics, Taylor & Francis Journals, vol. 34(18), pages 2239-2247.
    5. Timothy G. Taylor & J. Scott Shonkwiler, 1985. "Interdependent Supply Functions and Revisional Price Expectations," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 33(3), pages 285-298, November.
    6. Karl D. Meilke, 1976. "Acreage Response to Policy Variables in the Prairie Provinces," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 58(3), pages 572-577.
    7. Jeffrey D. McDonald & Daniel A. Sumner, 2003. "The Influence of Commodity Programs on Acreage Response to Market Price: With an Illustration Concerning Rice Policy in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 857-871.
    8. James K. Whittaker & Robert L. Bancroft, 1979. "Corn Acreage Response-Function Estimation with Pooled Time-Series and Cross-Sectional Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(3), pages 551-553.
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    Cited by:

    1. Shepherd, Ben, 2006. "Estimating Price Elasticities of Supply for Cotton: A Structural Time-Series Approach," MPRA Paper 1252, University Library of Munich, Germany.

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