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A Dynamic Approach to Estimating and Testing Separability in U.S. Demand for Imported and Domestic Meats

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  • Tullaya Boonsaeng
  • Michael K. Wohlgenant

Abstract

The paper develops dynamic model of demand for domestic and imported meats and compares the performance of the dynamic model called the general AIDS error correction model (GAECM) with the static linear approximate almost ideal demand system (LA/AIDS) model. A test for separability is developed based on the long‐run solution to the dynamic model. The results indicate rejection of the static model in favor of the dynamic model. Homogeneity and symmetry are shown to hold for the dynamic model but are strongly rejected for the static model. Finally, separability between domestic and imported meats is rejected for all models at the 5% level of significance. However, the results of the dynamic model based on the corrected likelihood test with a low p‐value (p= 0.038) indicate that rejection of separability is borderline. Le présent article porte sur l'élaboration d'un modèle dynamique de la demande de viandes produites au pays et de viandes importées, et compare la performance du modèle dynamique appelé modèle général de correction d'erreur AIDS avec le modèle statique LA/AIDS. Un test de séparabilité est élaboré d'après la solution à long terme du modèle dynamique. Les résultats indiquent le rejet du modèle statique en faveur du modèle dynamique. L'homogénéité et la symétrie sont valables pour le modèle dynamique, mais sont fortement rejetées dans le cas du modèle statique. Finalement, la séparabilité entre les viandes produites au pays et les viandes importées est rejetée pour tous les modèles à un seuil de signification de 5 p. 100. Cependant, les résultats du modèle dynamique, fondés sur la correction du test du rapport des vraisemblances avec une faible valeur p (p = 0,038), indiquent que le rejet de la séparabilité se situe à la limite.

Suggested Citation

  • Tullaya Boonsaeng & Michael K. Wohlgenant, 2009. "A Dynamic Approach to Estimating and Testing Separability in U.S. Demand for Imported and Domestic Meats," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(1), pages 139-157, March.
  • Handle: RePEc:bla:canjag:v:57:y:2009:i:1:p:139-157
    DOI: 10.1111/j.1744-7976.2008.01142.x
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    3. Motallebi, Marzieh & Pendell, Dustin L., 2013. "Estimating an Almost Ideal Demand System Model for Meats in Iran," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150188, Agricultural and Applied Economics Association.

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