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A Critique Of The Constant Elasticity Of Transformation (Cet) Linear Supply System

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  • Shumway, C. Richard
  • Powell, Alan A.

Abstract

An elusive restriction maintained in earlier CET supply models with three or more products is shown to result in a potentially serious misspecification. Its impact on empirical estimates is found to be substantial, and an alternative formulation is presented which overcomes the problem while still maintaining the CET hypothesis.

Suggested Citation

  • Shumway, C. Richard & Powell, Alan A., 1984. "A Critique Of The Constant Elasticity Of Transformation (Cet) Linear Supply System," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 9(2), pages 1-8, December.
    • Handle: RePEc:ags:wjagec:32129
    DOI: 10.22004/ag.econ.32129
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    References listed on IDEAS

    as
    1. Vincent, David P & Dixon, Peter B & Powell, Alan A, 1980. "The Estimation of Supply Response in Australian Agrucilture: The CRESH/CRETH Production System," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 221-242, February.
    2. J. P. Houck & M. E. Ryan, 1972. "Supply Analysis for Corn in the United States: The Impact of Changing Government Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(2), pages 184-191.
    3. Grant M. Scobie & Paul R. Johnson, 1974. "Protection and Exchange Rate: An Analysis of the New Zealand Foreign Exchange Market," The Economic Record, The Economic Society of Australia, vol. 50(4), pages 534-554, December.
    4. Houck, James P. & Ryan, Mary E., 1972. "Supply Analysis For Corn In The United States: The Impact Of Changing Government Programs," Staff Papers 13554, University of Minnesota, Department of Applied Economics.
    5. Scobie, Grant M & Johnson, Paul R, 1974. "Protection and Exchange Rate: An Analysis of the New Zealand Foreign Exchange Market," The Economic Record, The Economic Society of Australia, vol. 50(132), pages 534-554, December.
    6. Shumway, C. Richard & Chang, A. Anne, 1980. "Supply Response Of Texas Field Crops: An Evaluation Of The Cet Linear Supply Model," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 5(2), pages 1-16, December.
    7. Shumway, C. Richard & Green, Robert C., 1982. "Joint Estimation of U.S. Field Crop Supply Functions," Departmental Reports 256826, Texas A&M University, Department of Agricultural Economics.
    8. C. Richard Shumway, 1983. "Supply, Demand, and Technology in a Multiproduct Industry: Texas Field Crops," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(4), pages 748-760.
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    Cited by:

    1. Ruslana Rachel PALATNIK, 2008. "Climate Change Assessment and Agriculture in General Equilibrium Models: Alternative Modeling Strategies," EcoMod2008 23800101, EcoMod.
    2. St�phanie Monjon & Philippe Quirion, 2011. "A border adjustment for the EU ETS: reconciling WTO rules and capacity to tackle carbon leakage," Climate Policy, Taylor & Francis Journals, vol. 11(5), pages 1212-1225, September.
    3. Lakatos, Csilla & Walmsley, Terrie, 2012. "Investment creation and diversion effects of the ASEAN–China free trade agreement," Economic Modelling, Elsevier, vol. 29(3), pages 766-779.
    4. Mjelde, James W. & Hollinger, Steven E., 1987. "Development of Climate Indices for Application in Empirical Crop Production Studies," Staff Paper Series 257982, Texas A&M University, Department of Agricultural Economics.
    5. Shumway, C. Richard, 1986. "Supply Relationships In The South - What Have We Learned?," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 18(1), pages 1-9, July.

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