A Theoretical And Empirical Investigation Of The Supply Response In The U.S. Beef-Cattle Industry
This paper investigates the response of beef cattle producers to changes in the price of cattle. Previous research has suggested that there may be a negative short-run supply response to a permanent increase in the price of cattle. We build a dynamic, rational expectations model that predicts that the supply response is generally positive, even for permanent shocks in the short run, and nests the negative supply response as a special case for appropriately restricted demand shocks. Using annual US time series data (1930-1997) and a simultaneous-equations econometric approach, we find a positive short-run supply response in the cow market and mixed evidence in the heifer market.
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- Harry J. Paarsch, 1985. "Micro-economic Models of Beef Supply," Canadian Journal of Economics, Canadian Economics Association, vol. 18(3), pages 636-51, August.
- Capps, Oral & Farris, Donald E. & Byrne, Patrick J. & Namken, Jerry C. & Lambert, Charles D., 1994. "Determinants of Wholesale Beef-Cut Prices," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 26(01), pages 183-199, July.
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