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Simultaneity and Structural Change in U.S. Meat Demand
Author(s) -
Eales James S.,
Unnevehr Laurian J.
Publication year - 1993
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1242910
Subject(s) - endogeneity , simultaneity , almost ideal demand system , economics , inverse demand function , econometrics , order (exchange) , derived demand , production (economics) , livestock , microeconomics , demand curve , physics , finance , classical mechanics , ecology , biology
An inverse of the Almost Ideal Demand System, the IAIDS, is developed in order to test the endogeneity of prices and quantities in the U.S. meat demand system. The IAIDS has all the desirable theoretical properties of the AIDS except aggregation from the micro to the market level. Using annual data, both prices and quantities appear to be endogenous within the entire meat market. Including livestock production costs and technical change indicators as instruments eliminates evidence of a mid 1970s demand change.