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Box-Cox Transformations And Error Term Specification In Demand Models

Author

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  • Blaylock, James R.
  • Smallwood, David M.

Abstract

This paper analyzes the influence of error-term specification and functional form on a quarterly demand model for beef. The Box-Cox transformation is used to generalize the functional form while the equation error term is postulated to be both heteroskedastic and autoregressive. Results indicated that both functional form and error-term specification can play a major role in elasticity estimation, elasticity behavior, and hypothesis testing.

Suggested Citation

  • Blaylock, James R. & Smallwood, David M., 1983. "Box-Cox Transformations And Error Term Specification In Demand Models," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 8(01), pages 1-8, July.
    • Handle: RePEc:ags:wjagec:32488
    DOI: 10.22004/ag.econ.32488
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    References listed on IDEAS

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    1. Zuhair A. Hassan & Stanley R. Johnson, 1979. "The Demand for Meat in Canada: an Application of the Transformation of the Variables," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 27(3), pages 1-12, November.
    2. Kulshreshtha, Surendra N., 1979. "Functional Form Specification In The Quarterly Demand For Red Meats In Canada," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 4(2), pages 1-10, December.
    3. Blaylock, James R. & Salathe, Larry E. & Green, Richard D., 1980. "A Note On The Box-Cox Transformation Under Heteroskedasticity," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 5(2), pages 1-8, December.
    4. Blaylock, James R & Smallwood, David M, 1982. "Analysis of Income and Food Expenditure Distributions: A Flexible Approach," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 104-109, February.
    5. Chang, Hui-shyong, 1977. "Functional Forms and the Demand for Meat in the United States," The Review of Economics and Statistics, MIT Press, vol. 59(3), pages 355-359, August.
    6. Huang, Cliff J & Grawe, Oliver R, 1980. "Functional Forms and the Demand for Meat in the United States: A Comment," The Review of Economics and Statistics, MIT Press, vol. 62(1), pages 144-146, February.
    7. Lahiri, Kajal & Egy, Daniel, 1981. "Joint estimation and testing for functional form and heteroskedasticity," Journal of Econometrics, Elsevier, vol. 15(2), pages 299-307, February.
    8. Gemmill, Gordon, 1980. "Using the Box-Cox Form for Estimating Demand: A Comment," The Review of Economics and Statistics, MIT Press, vol. 62(1), pages 147-148, February.
    9. Gaudry, Marc J. I. & Dagenais, Marcel G., 1979. "Heteroscedasticity and the use of Box-Cox transformations," Economics Letters, Elsevier, vol. 2(3), pages 225-229.
    10. Savin, N. E. & White, Kenneth J., 1978. "Estimation and testing for functional form and autocorrelation : A simultaneous approach," Journal of Econometrics, Elsevier, vol. 8(1), pages 1-12, August.
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    Cited by:

    1. Moschini, GianCarlo & Meilke, Karl D., 1984. "Parameter Stability And The U.S. Demand For Beef," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 9(2), pages 1-12, December.

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