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Aggregation of Heterogeneous Firms in Mathematical Programming Models

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  • Onal, Hayri
  • McCarl, Bruce A

Abstract

Serious aggregation errors may arise in mathematical programming sector models when aggregation is not properly done. Existing aggregation literature mostly focuses on exact aggregation of homogenous groups of firms. However, homogeneity rarely holds in real problem situations. Moreover, theoretical aggregation developments are generally based on the assumption of availability of full information about the firms to be aggregated. Such full information is hardly a plausible assumption when modeling the agricultural sector. This paper discusses an empirical aggregation approach based on decomposition theory, which may be particularly helpful while aggregating heterogenous firms under the absence of full information. Copyright 1989 by Oxford University Press.

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Bibliographic Info

Article provided by Foundation for the European Review of Agricultural Economics in its journal European Review of Agricultural Economics.

Volume (Year): 16 (1989)
Issue (Month): 4 ()
Pages: 499-513

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Handle: RePEc:oup:erevae:v:16:y:1989:i:4:p:499-513

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Cited by:
  1. Greiner, Romy, 1996. "On-farm Costs of Soil Salinisation: a Case Study for the Liverpool Plains in New South Wales," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 64(01), April.
  2. Frahan, Bruno Henry de, 2005. "PMP, Extensions and Alternative Methods: Introductory Review of the State of the Art," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24537, European Association of Agricultural Economists.
  3. Onal, Hayri & Chen, Xiaoguang & Khanna, Madhu & Huang, Haixiao, 2009. "Mathematical Programming Modeling of Agricultural Supply Response," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49469, Agricultural and Applied Economics Association.
  4. Christiane Kurtze & Katrin Springer, 1999. "Modelling the Economic Impact of Global Warming in a General Equilibrium Framework," Kiel Working Papers 922, Kiel Institute for the World Economy.
  5. Kahil, Mohamed Taher & Albiac, José, 2013. "Greenhouse gases mitigation policies in the agriculture of Aragon, Spain," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), issue 1, April.
  6. Batterham, Robert L. & MacAulay, T. Gordon, 1994. "Price-Linked Farm And Spatial Equilibrium Models," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 38(02), August.
  7. Schmid, Erwin & Sinabell, Franz & Hofreither, Markus F., 2007. "Phasing out of environmentally harmful subsidies: Consequences of the 2003 CAP reform," Ecological Economics, Elsevier, vol. 60(3), pages 596-604, January.
  8. Hofreither, Markus F. & Schmid, Erwin & Sinabell, Franz, 2004. "Phasing Out Of Environmentally Harmful Subsidies: Effects Of The Cap 2003 Reform," 2004 Annual meeting, August 1-4, Denver, CO 20169, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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