AN ALTERNATIVE APPROACH TO DETERMINING THE ELASTICITY OF EXCESS DEMAND FACING THE UNITED STATES

Douglas J. Miller and Philip L. Paarlberg

No 20587, 2001 Annual meeting, August 5-8, Chicago, IL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The United States embarked on a policy assuming excess demands for commodities are elastic. Some analysts question the success of that policy and argue that excess demands for farm commodities are inelastic. The controversy is deepened because the two traditional techniques for determining excess demand elasticities yield opposing estimates. We use an alternative technique based on observed variation in commodity prices, production, and use. The point estimates show excess demands for wheat, coarse grains, soybeans, rice, and cotton are elastic. However, a one-sided bootstrap test cannot reject the null hypothesis that the excess demands for wheat, coarse grains, and soybeans are inelastic.

Keywords: Demand; and; Price; Analysis (search for similar items in EconPapers)
Pages: 32
Date: 2001
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea01:20587

DOI: 10.22004/ag.econ.20587

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