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Improvement of GTAP Cropland Constant Elasticity of Transformation Nesting Structure

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  • Li, Liang
  • Taheripour, Farzad
  • Preckel, Paul V.
  • Tyner, Wallace E.

Abstract

This paper suggests a new approach to econometrically estimate parameters of multi-level Constant Elasticity of Transformation (CET) functional forms which are widely used in developing Computable General Equilibrium (CGE) models. An illustrative CET functional form is estimated using the proposed method based on historical data taken from the U.S. economy for the time period of 1996-210 to evaluate the performance of the new method. The proposed estimation process may be used to improve the existing cropland frontier used in GTAP-BIO model. Currently, the cropland frontier in GTAP-BIO model supplies land to different crops using a simple one-level CET function due to the lack of empirically estimated more flexible functional forms. The proposed method provides an opportunity to estimate more flexible multi-level CET functional forms according to available historical data. This will help to change the land supply side of the GTAP-BIO model based on historical observations.

Suggested Citation

  • Li, Liang & Taheripour, Farzad & Preckel, Paul V. & Tyner, Wallace E., 2012. "Improvement of GTAP Cropland Constant Elasticity of Transformation Nesting Structure," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124704, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea12:124704
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    File URL: http://ageconsearch.umn.edu/record/124704/files/Improvement%20of%20GTAP%20Cropland%20Constant%20Elasticity%20of%20Transformation%20Nesting%20Structure.pdf
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    References listed on IDEAS

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    1. Lee, Huey-Lin & Hertel, Thomas & Rose, Steven & Avetisyan, Misak, 2008. "An Integrated Global Land Use Data Base for CGE Analysis of Climate Policy Options," GTAP Working Papers 2603, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    2. Roman Keeney & Thomas W. Hertel, 2009. "The Indirect Land Use Impacts of United States Biofuel Policies: The Importance of Acreage, Yield, and Bilateral Trade Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 895-909.
    3. Eboli, Fabio & Parrado, Ramiro & Roson, Roberto, 2010. "Climate-change feedback on economic growth: explorations with a dynamic general equilibrium model," Environment and Development Economics, Cambridge University Press, vol. 15(05), pages 515-533, October.
    4. Brent Sohngen & Robert Mendelsohn & Roger Sedjo, 1999. "Forest Management, Conservation, and Global Timber Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 1-13.
    5. Ahmed, Syud Amer & Thomas Hertel & Ruben Lubowski, 2009. "Calibration of a Land Cover Supply Function Using Transition Probabilities," GTAP Research Memoranda 2947, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    6. Gurgel Angelo & Reilly John M & Paltsev Sergey, 2007. "Potential Land Use Implications of a Global Biofuels Industry," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(2), pages 1-36, December.
    7. Burniaux, Jean-Marc & Truong Truong, 2002. "GTAP-E: An Energy-Environmental Version of the GTAP Model," GTAP Technical Papers 923, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    8. Keeney, Roman & Hertel, Thomas, 2008. "The Indirect Land Use Impacts of U.S. Biofuel Policies: The Importance of Acreage, Yield, and Bilateral Trade Responses," GTAP Working Papers 2810, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    9. R. Ashley P. Winston, 2009. "Enhancing Agriculture and Energy Sector Analysis in CGE Modelling: An Overview of Modifications to the USAGE Model," Centre of Policy Studies/IMPACT Centre Working Papers g-180, Victoria University, Centre of Policy Studies/IMPACT Centre.
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    Keywords

    Crop Production/Industries; Land Economics/Use; Research Methods/ Statistical Methods;

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