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Forecast evaluations in meat demand analysis

Author

Listed:
  • Zijun Wang

    (Private Enterprise Research Center, Academic Building West, Room 3028, Texas A&M University, College Station, Texas 77843-4231., E-mail: z-wang@tamu.edu)

  • David A. Bessler

    (Department of Agricultural Economics, Texas A&M University, College Station, Texas 77843-4231., E-mail: d-bessler@tamu.edu)

Abstract

This article offers a comparison of short-term forecasting ability of five demand systems with an application to U.S. meat consumption. Four static demand systems (AIDS, Rotterdam, AIM, and DGM) and a dynamic Vector Error Correction Model (VECM) are considered. We tested the equality of mean square forecast errors. We also investigated the possibility of forecast encompassing among competing models. In general, the dynamic VECM model performed best, followed by the simple causal DGM model. Among three static systems, the AIDS model slightly leads the competition. Furthermore, this article provides the first evidence in literature on whether imposition of homogeneity restrictions on a cointegration space can improve the forecast accuracy of a VECM model: it does when it holds. [EconLit citations: Q10; C53]. © 2003 Wiley Periodicals, Inc. Agribusiness 19: 505-523, 2003.

Suggested Citation

  • Zijun Wang & David A. Bessler, 2003. "Forecast evaluations in meat demand analysis," Agribusiness, John Wiley & Sons, Ltd., vol. 19(4), pages 505-523.
    • Handle: RePEc:wly:agribz:v:19:y:2003:i:4:p:505-523
    DOI: 10.1002/agr.10074
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    References listed on IDEAS

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    1. Mu, Jianhong E. & McCarl, Bruce A. & Bessler, David A., 2013. "Impacts of BSE and Avian Influenza on U.S. Meat Demand," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150392, Agricultural and Applied Economics Association.
    2. 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.
    3. Guy Chapda Nana & Bruno Larue, 2014. "Imposing curvature conditions on flexible functional forms for GNP functions," Empirical Economics, Springer, vol. 47(4), pages 1411-1440, December.
    4. 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.
    5. Chapda Nana, Guy & Larue, Bruno, 2012. "Imposing Curvature Conditions on Flexible Functional Forms to GNP Functions," Working Papers 123308, University of Laval, Center for Research on the Economics of the Environment, Agri-food, Transports and Energy (CREATE).

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