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A Bayesian Alternative To Generalized Cross Entropy Solutions For Underdetermined Econometric Models

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  • Heckelei, Thomas
  • Mittelhammer, Ronald C.
  • Jansson, Torbjorn

Abstract

This paper presents a Bayesian alternative to Generalized Maximum Entropy (GME) and Generalized Cross Entropy (GCE) methods for deriving solutions to econometric models represented by underdetermined systems of equations. For certain types of econometric model specifications, the Bayesian approach provides fully equivalent results to GME-GCE techniques. However, in its general form, the proposed Bayesian methodology allows a more direct and straightforwardly interpretable formulation of available prior information and can reduce significantly the computational effort involved in finding solutions. The technique can be adapted to provide solutions in situations characterized by either informative or uninformative prior information.

Suggested Citation

  • Heckelei, Thomas & Mittelhammer, Ronald C. & Jansson, Torbjorn, 2008. "A Bayesian Alternative To Generalized Cross Entropy Solutions For Underdetermined Econometric Models," Discussion Papers 56973, University of Bonn, Institute for Food and Resource Economics.
  • Handle: RePEc:ags:ubfred:56973
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    File URL: http://ageconsearch.umn.edu/record/56973/files/dispap08_02.pdf
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    References listed on IDEAS

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    Cited by:

    1. Gocht, Alexander & Roder, Norbert, 2011. "Salvage the treasure of geographic information in Farm census data," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 115982, European Association of Agricultural Economists.
    2. Louhichi, Kamel & Ciaian, Pavel & Espinosa, Maria & Colen, Liesbeth & Perni, Angel & Paloma, Sergio, 2015. "The Impact of Crop Diversification Measure: EU-wide Evidence Based on IFM-CAP Model," 2015 Conference, August 9-14, 2015, Milan, Italy 211542, International Association of Agricultural Economists.
    3. Gocht, Alexander & Roder, Norbert, 2011. "Salvage the treasure of geographic information in Farm census data," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114824, European Association of Agricultural Economists.
    4. Adenauer, Marcel, 2008. "CAPRI versus AGLINK-COSIMO: Two partial equilibrium models - Two baseline approaches," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44120, European Association of Agricultural Economists.
    5. Hugo Storm & Thomas Heckelei & Ron C. Mittelhammer, 2016. "Bayesian estimation of non-stationary Markov models combining micro and macro data," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 43(2), pages 303-329.
    6. Marc Mueller & Emanuele Ferrari, 2012. "Social Accounting Matrices and Satellite Accounts for EU27 on NUTS2 Level (SAMNUTS2)," JRC Working Papers JRC73088, Joint Research Centre (Seville site).
    7. Gocht, Alexander & Britz, Wolfgang, 2011. "EU-wide farm type supply models in CAPRI--How to consistently disaggregate sector models into farm type models," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 146-167, January.
    8. Gocht, Alexander & Roeder, Norbert, 2010. "Recovering Localized Information On Agricultural Structure Underlying Data Confidentiality Regulations - Potentials Of Different Data Aggregation And Segregation Techniques," 50th Annual Conference, Braunschweig, Germany, September 29-October 1, 2010 93975, German Association of Agricultural Economists (GEWISOLA).
    9. Himics, Mihaly & Van Doorslaer, Benjamin & Ciaian, Pavel & Shrestha, Shailesh, 2012. "Increasing volatility of input costs in the EU agriculture," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122531, European Association of Agricultural Economists.
    10. Louhichi, Kamel & Jacquet, Florence & Butault, Jean Pierre, 2012. "Estimating input allocation from heterogeneous data sources: A comparison of alternative estimation approaches," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 0(Issue 2), pages 1-20.
    11. Mueller, Marc & Ferrari, Emanuele, 2011. "Deriving CGE Baselines from Macro-economic Projections," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114638, European Association of Agricultural Economists.
    12. Jakub Boratyński, 2016. "A Bayesian Approach to Matrix Balancing: Transformation of Industry-Level Data under NACE Revision," Central European Journal of Economic Modelling and Econometrics, CEJEME, vol. 8(4), pages 219-239, December.
    13. Witzke, Heinz Peter & Britz, Wolfgang, 2005. "Plagiarism Without Apology--Systematic Integration of Available Information in a Long Run Agricultural Outlook," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24666, European Association of Agricultural Economists.
    14. Britz, Wolfgang, 2008. "EU-wide spatial down-scaling of results of regional economic models to analyze environmental impacts," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6677, European Association of Agricultural Economists.
    15. Louhichi, Kamel & Ciaian, Pavel & Espinosa, Maria & Colen, Liesbeth & Perni, Angel & Gomez y Paloma, Sergio, 2015. "EU-wide individual Farm Model for CAP Analysis (IFM-CAP): Application to Crop Diversification Policy," 2015 Conference, August 9-14, 2015, Milan, Italy 212155, International Association of Agricultural Economists.
    16. Dominguez, Ignacio Perez & Wieck, Christine, 2006. "Welfare distribution between EU Member States through different national decoupling options. Implications for Spain," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 6(11).
    17. Marie Gabrielle Piketty & Lucie Weissleder & Hildo Meirelles de Souza Filho & Mário Otávio Batalha & Marcel Adenäuer & Arno Becker, 2009. "Assessing agricultural trade policies options with the European Union: a Brazilian perspective," Agricultural Economics, International Association of Agricultural Economists, vol. 40(4), pages 447-457, July.
    18. Weissleder, Lucie M. & Adenauer, Marcel & Heckelei, Thomas, 2008. "Impact assessment of trade liberalisation between EU and Mercosur countries," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6667, European Association of Agricultural Economists.
    19. Jansson, Torbjorn & Heckelei, Thomas, 2008. "Regional crop supply behaviour in the EU," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44009, European Association of Agricultural Economists.
    20. Gocht, Alexander & Britz, Wolfgang, 2010. "Eu-Wide Farm Types Supply In Capri - How To Consistently Disaggregate Sector Models Into Farm Type Model," 50th Annual Conference, Braunschweig, Germany, September 29-October 1, 2010 93960, German Association of Agricultural Economists (GEWISOLA).
    21. repec:bla:jageco:v:68:y:2017:i:3:p:651-681 is not listed on IDEAS
    22. Alexander Gocht & Pavel Ciaian & Maria Bielza & Jean-Michel Terres & Norbert Röder & Mihaly Himics & Guna Salputra, 2017. "EU-wide Economic and Environmental Impacts of CAP Greening with High Spatial and Farm-type Detail," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(3), pages 651-681, September.

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