IDEAS home Printed from https://ideas.repec.org/p/ags/eureia/272289.html
   My bibliography  Save this paper

Likelihood Diagnostics And Bayesian Analysis Of A Micro-Economic Disequilibrium Model For Retail Services

Author

Listed:
  • Kooiman, Peter
  • van Dijk, Herman K.
  • Thurik, A. Roy

Abstract

In this paper we apply Maximum Likelihood and Bayesian methods to explain differences in floorspace productivity among retail establishments in the grocery trade. The model we develop is a switching model where sales are either supply determined or demand determined. Under excess supply the model allows for so-called 'trading-down', i.e., an increase in the share of selling area, and, thereby, a decrease in service level. To estimate our model we employ a cross-section of observations on individual shops. We present maximum likelihood results, and also study the shape of the likelihood surface by means of Monte Carlo numerical integration methods. With a uniform prior we obtain marginal posterior density functions both of the parameters of interest and of the average probability of the excess supply regime in the sample. The average probability of excess supply is .23, with a standard deviation of .06. This shows that, according to our estimates, excess demand is the rule and excess supply the exception in the sample that we analyse.

Suggested Citation

  • Kooiman, Peter & van Dijk, Herman K. & Thurik, A. Roy, 1985. "Likelihood Diagnostics And Bayesian Analysis Of A Micro-Economic Disequilibrium Model For Retail Services," Econometric Institute Archives 272289, Erasmus University Rotterdam.
    • Handle: RePEc:ags:eureia:272289
    DOI: 10.22004/ag.econ.272289
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/272289/files/erasmus165.pdf
    Download Restriction: no
    File URL: https://ageconsearch.umn.edu/record/272289/files/erasmus165.pdf?subformat=pdfa
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.272289?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Van Dijk, Herman K. & Kloek, Teun & Boender, C. Guus E., 1985. "Posterior moments computed by mixed integration," Journal of Econometrics, Elsevier, vol. 29(1-2), pages 3-18.
    2. Maddala, G S & Nelson, Forrest D, 1974. "Maximum Likelihood Methods for Models of Markets in Disequilibrium," Econometrica, Econometric Society, vol. 42(6), pages 1013-1030, November.
    3. Rosen, Harvey S & Quandt, Richard E, 1978. "Estimation of a Disequilibrium Aggregate Labor Market," The Review of Economics and Statistics, MIT Press, vol. 60(3), pages 371-379, August.
    4. Nicholas M. Kiefer, 1980. "A Note on Regime Classification in Disequilibrium Models," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(3), pages 637-639.
    5. Goldfelfd, Stephen M. & Quandt, Richard E., 1975. "Estimation in a disequilibrium model and the value of information," Journal of Econometrics, Elsevier, vol. 3(4), pages 325-348, November.
    6. Kooiman, P, 1984. "Smoothing the Aggregate Fix-Price Model and the Use of Business Survey Data," Economic Journal, Royal Economic Society, vol. 94(376), pages 899-913, December.
    7. Ginsburgh, Victor & Tishler, Asher & Zang, Israel, 1980. "Alternative estimation methods for two-regime models : A mathematical programming approach," European Economic Review, Elsevier, vol. 13(2), pages 207-228, March.
    8. Kooiman, P. & Kloek, T., 1985. "An empirical two market disequilibrium model for Dutch manufacturing," European Economic Review, Elsevier, vol. 29(3), pages 323-354.
    9. Laffont, Jean-Jacques & Garcia, Rene, 1977. "Disequilibrium Econometrics for Business Loans," Econometrica, Econometric Society, vol. 45(5), pages 1187-1204, July.
    10. GINSBURGH, Victor & TISHLER, Asher & ZANG, Israel, 1980. "Alternative estimation methods for two-regime models," LIDAM Reprints CORE 393, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    11. Fair, Ray C & Jaffee, Dwight M, 1972. "Methods of Estimation for Markets in Disequilibrium," Econometrica, Econometric Society, vol. 40(3), pages 497-514, May.
    12. Gersovitz, Mark, 1980. "Classification probabilities for the disequilibrium model," Journal of Econometrics, Elsevier, vol. 14(2), pages 239-246, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. van Dijk, H. K., 1987. "Some Advances In Bayesian Estimation Methods Using Monte Carlo Integration," Econometric Institute Archives 272361, Erasmus University Rotterdam.
    2. A. Roy Thurik, 1986. "Productivity in Small Business: An Analysis Using African Data," Entrepreneurship Theory and Practice, , vol. 11(1), pages 27-42, July.
    3. van Dalen, J. & Koerts, J. & Thurik, A. R., 1987. "The analysis of demand and supply factors in retailing using a disequilibrium model," Econometric Institute Archives 272364, Erasmus University Rotterdam.
    4. H. Vinod, 1989. "Kernel estimation for disequilibrium models for floorspace efficiency in retailing," Journal of Productivity Analysis, Springer, vol. 1(1), pages 79-94, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lee, Lung-Fei, 1997. "A smooth likelihood simulator for dynamic disequilibrium models," Journal of Econometrics, Elsevier, vol. 78(2), pages 257-294, June.
    2. Plassard, Romain, 2022. "Diagnosing unemployment: the dual project of the ENSAE's band," MPRA Paper 113584, University Library of Munich, Germany.
    3. Gerald Manthalu, 2019. "User fee exemption and maternal health care utilisation at mission health facilities in Malawi: An application of disequilibrium theory of demand and supply," Health Economics, John Wiley & Sons, Ltd., vol. 28(4), pages 461-474, April.
    4. Holmberg, Ulf, 2012. "Error Corrected Disequilibrium," Umeå Economic Studies 837, Umeå University, Department of Economics.
    5. Lorenzo Burlon & Davide Fantino & Andrea Nobili & Gabriele Sene, 2016. "The quantity of corporate credit rationing with matched bank-firm data," Temi di discussione (Economic working papers) 1058, Bank of Italy, Economic Research and International Relations Area.
    6. Philippe Adair & Fredj Fhima, 2014. "Small and Medium-sized Enterprises' Credit Rationing on the Tunisian Bank Credit Market," Post-Print hal-01667356, HAL.
    7. Tensie Steijvers & Wim Voordeckers, 2009. "Collateral And Credit Rationing: A Review Of Recent Empirical Studies As A Guide For Future Research," Journal of Economic Surveys, Wiley Blackwell, vol. 23(5), pages 924-946, December.
    8. Hurlin, Christophe & Kierzenkowski, Rafal, 2007. "Credit market disequilibrium in Poland: Can we find what we expect?: Non-stationarity and the short-side rule," Economic Systems, Elsevier, vol. 31(2), pages 157-183, June.
    9. Wall, Larry D. & Peterson, David R., 1995. "Bank holding company capital targets in the early 1990s: The regulators versus the markets," Journal of Banking & Finance, Elsevier, vol. 19(3-4), pages 563-574, June.
    10. Kremp, Elizabeth & Sevestre, Patrick, 2013. "Did the crisis induce credit rationing for French SMEs?," Journal of Banking & Finance, Elsevier, vol. 37(10), pages 3757-3772.
    11. Luc Bauwens & Michel Lubrano, 2007. "Bayesian Inference in Dynamic Disequilibrium Models: An Application to the Polish Credit Market," Econometric Reviews, Taylor & Francis Journals, vol. 26(2-4), pages 469-486.
    12. Ashoka Mody & Mark P. Taylor, 2013. "International capital crunches: the time-varying role of informational asymmetries," Applied Economics, Taylor & Francis Journals, vol. 45(20), pages 2961-2973, July.
    13. Felices, Guillermo & Orskaug, Bjorn-Erik, 2008. "Estimating the determinants of capital flows to emerging market economies: a maximum likelihood disequilibrium approach," Bank of England working papers 354, Bank of England.
    14. Karmelavičius, Jaunius & Mikaliūnaitė-Jouvanceau, Ieva & Petrokaitė, Austėja Petrokaitė, 2022. "Housing and credit misalignments in a two-market disequilibrium framework," ESRB Working Paper Series 135, European Systemic Risk Board.
    15. Chambers, Robert G. & Just, Richard E. & Moffitt, L. Joe & Rowe, Gordon A., 1979. "Disequilibrium Analysis for Fluid Milk," CUDARE Working Papers 242457, University of California, Berkeley, Department of Agricultural and Resource Economics.
    16. Juan Luis Vega, 1992. "El papel del crédito en el mecanismo de transmisión monetaria," Estudios Económicos, Banco de España, number 48.
    17. Farinha, Luísa & Félix, Sónia, 2015. "Credit rationing for Portuguese SMEs," Finance Research Letters, Elsevier, vol. 14(C), pages 167-177.
    18. Bierings, H. & Sneek, K., 1989. "Pseudo maximum likelihood techniques in a simple rationing model of the Dutch labour market," Serie Research Memoranda 0063, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    19. Seyedeh Asieh H. Tabaghdehi, 2018. "Market collusion and regime analysis in the US gasoline market," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 7(1), pages 1-14, December.
    20. Lee, Lung-Fei, 1997. "Simulation estimation of dynamic switching regression and dynamic disequilibrium models -- some Monte Carlo results," Journal of Econometrics, Elsevier, vol. 78(2), pages 179-184, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:eureia:272289. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/feeurnl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.