On the Search of Appropriate Price Determination Specifications in Structural Models

Dean Chen and Gerard Dharmaratne

No 285962, 1981-1999 Conference Archive from NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management

Abstract: A comprehensive set of criteria for evaluation of price determination specifications is proposed. A generalized theoretical relationship is developed to facilitate the search of appropriate structural models. Price elasticities, price flexibilities, and demand shares of the model are used to test the price response behavior of simultaneous structural models. A wheat model is used for empirical comparison of three popular inverse demand (price-dependent) structural model specifications: domestic demand model, export demand model, and stock demand model. Results indicate that price-depent domestic demand and price-dependent export demand are inappropriate, while the price-depend stock demand model generates credible results.

Keywords: Marketing (search for similar items in EconPapers)
Date: 1991-04
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nc8191:285962

DOI: 10.22004/ag.econ.285962

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