Anya M. McGuirk

Misspecification Testing: A Comprehensive Approach

Misspecification tests of individual assumptions underlying regression models often lead to erroneous conclusions regarding source of misspecification. Monte Carlo experiments demonstrate that a comprehensive set of individual and joint tests reduces the likelihood of such conclusions. A practical testing strategy is proposed and suggestions made regarding its implementation.

The problem of near-multicollinearity revisited: erratic vs systematic volatility

Abstract The main argument of the paper is that the traditional discussion of near-multicollinearity ‘boils down’ to two rather different issues which are often conflated: (a) a structural issue (high correlation among regressors) which, under certain conditions, gives rise to systematic volatility, and (b) a numerical issue (the regressor data matrix (XTX) is ill-conditioned) which gives rise to erratic volatility. We call into question the traditional account concerning the effects of increasing the correlation among the regressors, and we put forward a revised account of systematic volatility. The main conclusion is that the precision of the coefficient estimators and the associated t-ratios do not necessarily decrease as the correlation among regressors increases. We also question the traditional methods of detecting erratic volatility and propose norm bounds for quantifying the potential problem.

The Transition of Punjab Agriculture: A Choice of Technique Approach

The introduction of modern crop varieties in Punjab, India, led to rapid income growth. Adoption rate and level of the new varieties is examined using a choice-of-technique approach, in which techniques of production are identified by crop variety, season of growth, and method of production. Modeling the dynamic effects of technology, resource availability, and incentives reveals a consistent picture of the transition process. The results show the importance of incentives and availability of quasi-fixed inputs such as irrigation, fertilizers, and roads. By the late 1970s, the long-run aggregate supply elasticity was between 1.3–1.5.

Modeling exchange rate dynamics: Non-linear dependence and thick tails

This paper illustrates a new approach to the statistical modeling of non-linear dependence and leptokurtosis in exchange rate data. The students t autoregressive model withdynamic heteroskedasticity (STAR) of spanos (1992) is shown to provide a parsimonious and statistically adequate representation of the probabilistic information in exchange rate data. For the STAR model, volatility predictions are formed via a sequentially updated weighting scheme which uses all the past history of the series. The estimated STAR models are shown to statistically dominate alternative ARCH-type formulations and suggest that volatility predictions are not necessarily as large or as variable as other models indicate.

Consumer Reaction to the Introduction of Bovine Somatotropin

Bovine somatotropin (BST) is among the initial products of biotechnology under development for commercial use in food production. Dairy cows injected with BST yield as much as 10 to 25 percent more milk with feed efficiency increased by 5 to 15 percent. A considerable amount of research has been conducted to analyze the impacts of BST adoption on the U.S. dairy industry (e.g., Sellschopp and Kalter 1989, Fallert et al. 1987, Kuchler and McClelland 1989, Kimball and Rogers 1986). Existing research has focused on production-related aspects of BST technology, but comparatively little research is available on potential consumption-related consequences of BST adoption.

Assessments of the Educational Value of Web-Based Instructional Tools for Introductory Agricultural Economic

A web site was designed and introduced to an introductory agricultural microeconomics course. The web site provided students with supplemental reviews, practice problems, self-tests, and a simulation exercise. A variety of quantitative assessments were conducted to determine whether the web site influenced student learning, perceptions, and motivation. Results indicate the web site provided small to modest educational benefits.

Impacts of growth stimulants in the domestic livestock sector

Many individuals are predicting a second Green Revolution in agriculture from the introduction of growth stimulants into the livestock industries. An economy-wide approach is used to determine the affects on prices and quantities of introducing growth stimulants in the domestic dairy and pork industries. In general, the impacts are found to be much smaller than previous research focused at the sectoral level has suggested. Increases in the amount of lean meat per hog may actually lead to a reduction in the total number of hogs slaughtered.

Dietary Bounds and Unshackled Demand Specifications

Conventional tests of revealed preference axioms (WARP and GARP) may yield false rejections of the hypothesis of a unique preference ordering when consumers face constraints in addition to a budget constraint. In this paper, nonparametric tests of WARP and GARP are generalized for consumers who enforce multiple constraints. In conjunction with conventional tests, the modified tests are used to reject meat demand specifications that are functions solely of price and expenditure variables. Richer specifications that include consumer perceptions of the fat content of meats and the fat constraint value in addition to conventional price and expenditure variables cannot be rejected. Copyright 1997, Oxford University Press.

Residential Land Values in Urbanizing Areas

Zoning decisions related to residential lot size and density affect residential land value. Effects of size on residential parcel value in Roanoke County, VA, are estimated with fixed effects hedonic models. Parcel size; elevation; soil permeability; proximity to urban areas, malls, and roads; and location influence parcel value, but the effects vary by value of construction and development status. Parcel value per square meter declines with increasing parcel size. The estimated relationships could be used to evaluate zoning decisions in terms of land values and tax revenues if model estimation uncertainties and responses by developers to zoning strategies are considered.