The Use of Maximum Entropy to Estimate Input‐Output Coefficients From Regional Farm Accounting Data

Yves Léony, Ludo Peeters, Maurice Quinqu and Yves Surry

Journal of Agricultural Economics, 1999, vol. 50, issue 3, 425-439

Abstract: This paper proposes the use of the Generalised Maximum Entropy (GME) method to estimate input‐output coefficients, which reflect the unobserved allocation of farm input accounting costs to the various outputs produced. The GME method uses Shannon's information criterion as a basis for estimation. The performance of the GME method is compared with three other estimation techniques: Ordinary Least Squares (OLS), Bayesian estimation, and Linear Programming (LP). The various methods are applied to accounting data from a sample of beef‐dairy farms in Brittany, France. The analysis shows that the GME method offers an interesting alternative to “traditional” estimation methods. In contrast with the latter, though, the GME method is suitable to handle easily the problems of singularity, constrained estimation, and zero‐observations. Moreover, due to its flexibility, transparency and relative ease of implementation, the GME method is of great value to practitioners. However, the sensitivity of the GME estimates with respect to the design of the prior information set needs to be investigated further.

Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
https://doi.org/10.1111/j.1477-9552.1999.tb00891.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jageco:v:50:y:1999:i:3:p:425-439

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0021-857X

Access Statistics for this article

Journal of Agricultural Economics is currently edited by David Harvey

More articles in Journal of Agricultural Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().