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Testing Separability for Common Wheat Qualities in French Import Demand Market Using Aids and Rotterdam Demand Models

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  • Njonou, Rabelais Yankam
  • Frahan, Bruno Henry de
  • Surry, Yves R.
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    Abstract

    This study has used a corrected likelihood ratio, with AIDS and Rotterdam demand models, to test separability in three separable (A, B, C) wheat import demand structures on the French common wheat market. It appears from the study that the three separable Rotterdam structures are accepted by the test, while only two of them (B and C) are accepted in the case of AIDS at 5% level of significance. Meanwhile, model B seems to be more indicated in demand analysis with AIDS since it is the only one accepted at 15% level of significance. The results obtained demonstrate not only the necessity to test separability in demand structures, but also the necessity to know how the allocation models can be used for demand analysis purpose. The study has also shown a great difference in econometric results for AIDS and Rotterdam and pose once more the issue of the choice of a functional form in demand analysis.

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    Bibliographic Info

    Paper provided by European Association of Agricultural Economists in its series 2002 International Congress, August 28-31, 2002, Zaragoza, Spain with number 24921.

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    Date of creation: 2002
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    Handle: RePEc:ags:eaae02:24921

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    Keywords: Separability; Import demand; Rotterdam and AIDS demand models; wheat qualities; Demand and Price Analysis;

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    12. Davis, George C. & Jensen, Kimberly L., 1994. "Two-Stage Utility Maximization And Import Demand Systems Revisited: Limitations And An Alternative," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(02), December.
    13. Berndt, Ernst R & Savin, N Eugene, 1975. "Estimation and Hypothesis Testing in Singular Equation Systems with Autoregressive Disturbances," Econometrica, Econometric Society, vol. 43(5-6), pages 937-57, Sept.-Nov.
    14. Terry, Justin J. & Marsh, Thomas L., 2000. "Derived Demand For Wheat By Class," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36457, Western Agricultural Economics Association.
    15. Barnett, William A, 1979. "Theoretical Foundations for the Rotterdam Model," Review of Economic Studies, Wiley Blackwell, vol. 46(1), pages 109-30, January.
    16. Moschini, GianCarlo & Moro, D. & Green, Richard D., 1994. "Maintaining and Testing Separability in Demand Systems," Staff General Research Papers 11247, Iowa State University, Department of Economics.
    17. Hanoch, Giora, 1975. "Production and Demand Models with Direct or Indirect Implicit Additivity," Econometrica, Econometric Society, vol. 43(3), pages 395-419, May.
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    19. Italianer, Alexander, 1985. "A small-sample correction for the likelihood ratio test," Economics Letters, Elsevier, vol. 19(4), pages 315-317.
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