A theoretical and empirical investigation of the supply response in the U.S. beef-cattle industry

David Aadland (), DeeVon Bailey and Shuaizhang Feng

No 2000-12, Working Papers from Utah State University, Department of Economics

Abstract: This paper investigates the response of beef cattle producers to changes in the price of cattle. Previous research has suggested that there may be a negative short-run supply response to a permanent increase in the price of cattle. We build a dynamic, rational expectations model that predicts that the supply response is generally positive, even for permanent shocks in the short run, and nests the negative supply response as a special case for appropriately restricted demand shocks. Using annual U.S. time-series data (1930-1997) and a simultaneous-equations econometric approach, we find a positive short-run supply response in the cow market and mixed evidence in the heifer market.

Pages: 36 pages
New Economics Papers: this item is included in nep-agr and nep-cse
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https://repec.bus.usu.edu/RePEc/usu/pdf/ERI2000-12.pdf First version, 2000 (application/pdf)
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Related works:
Working Paper: A THEORETICAL AND EMPIRICAL INVESTIGATION OF THE SUPPLY RESPONSE IN THE U.S. BEEF-CATTLE INDUSTRY (2000)
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