On the Estimation of Supply and Demand Elasticities of Agricultural Commodites

Fabio Santeramo

MPRA Paper from University Library of Munich, Germany

Abstract: The report provides a literature review on the topic of estimation of demand and supply elasticities. To this end, it starts the discussion by summarizing the main facets of production theory and consumer theory to introduce the concept of elasticities, with examples of different types of elasticities most utilized in the literature. Next, it discusses the identification problem in estimating elasticities, i.e. the issue of having to solve for unique values of the parameters of the structural model from the values of the parameters of the reduced form of the model. It summarizes various methodologies employed in the literature to solve this problem and gives practical examples. These solutions include, but are not limited to, using instrumental variables, adopting a recursive structure, holding demand constant, and imposing inequality constraints in order to restrict the domain of estimates.

Keywords: Elasticity; demand; supply; identification; production theory; consumer theory (search for similar items in EconPapers)
JEL-codes: C1 D12 D22 Q12 (search for similar items in EconPapers)
Date: 2014-05-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: On the estimation of supply and demand elasticities of agricultural commodites (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:56126

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