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Testing for Aggregation and Simultaneous Bias in U.S. Soybean Export Equations

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  • Arnade, Carlos A.
  • Davison, Cecil W.

Abstract

Most previous estimates of elasticities of export demand for U.S. soybeans have emanated from single import equations subject to aggregation and simultaneous equation bias. This analysis tests U.S. soybean export data for aggregation and simultaneous equation bias and divides the aggregate data into six market equations to reduce these biases. Elasticity estimates from the six equations are compared with elasticity estimates from single equation OLS and 2SLS estimations using the same aggregate data. Results suggest that distortions from unjustified 2SLS estimation may exceed those from aggregation bias.

Suggested Citation

  • Arnade, Carlos A. & Davison, Cecil W., 1989. "Testing for Aggregation and Simultaneous Bias in U.S. Soybean Export Equations," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 21(2), pages 129-137, December.
    • Handle: RePEc:cup:jagaec:v:21:y:1989:i:02:p:129-137_00
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    References listed on IDEAS

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    1. Wu, De-Min, 1973. "Alternative Tests of Independence Between Stochastic Regressors and Disturbances," Econometrica, Econometric Society, vol. 41(4), pages 733-750, July.
    2. Hendrik C. Knipscheer & Lowell D. Hill & Bruce L. Dixon, 1982. "Demand Elasticities for Soybean Meal in the European Community," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(2), pages 249-253.
    3. Robert G. Chambers & Richard E. Just, 1981. "Effects of Exchange Rate Changes on U.S. Agriculture: A Dynamic Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(1), pages 32-46.
    4. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, May.
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    1. Shumway, C. Richard & Davis, George C., 2001. "Does consistent aggregation really matter?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(2), pages 1-34.
    2. Adhikari, Murali & Paudel, Laxmi & Houston, Jack E. & Paudel, Biswo Nath, 2003. "Measuring the Impacts of US Export Promotion Program for Wheat in Selected Importing Regions," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35161, Southern Agricultural Economics Association.
    3. Ahouissoussi, Nicolas B. C. & McIntosh, Christopher S. & Wetzstein, Michael E., 1995. "Rational Expectations Estimation of Georgia Soybean Acreage Response," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 27(2), pages 500-509, December.

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