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

Published online by Cambridge University Press:  05 September 2016

Carlos A. Arnade  and
Cecil W. Davison
Carlos A. Arnade
Affiliation:
Agriculture and Trade Analysis Division and Commodity Economics Division, ERS, U.S. Department of Agriculture
Cecil W. Davison
Affiliation:
Agriculture and Trade Analysis Division and Commodity Economics Division, ERS, U.S. Department of Agriculture
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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.

Keywords

aggregation biassimultaneous equation biassoybean exportsprice elasticitymarket share
Type
Submitted Articles
Information
Journal of Agricultural and Applied Economics , Volume 21 , Issue 2 , December 1989 , pp. 129 - 137
Copyright
Copyright © Southern Agricultural Economics Association 1989

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