Charles B. Hallahan

The Generalized Composite Commodity Theorem and Food Demand Estimation

This article reports tests of aggregation over consumer food products and estimates of aggregate food demand elasticities. Evidence that food demand variables follow unit root processes leads us to build on and simplify existing tests of the Generalized Composite Commodity Theorem. We compute food demand elasticities using a method of cointegration that is shown to apply to a convenient but nonlinear functional form. Estimates are based on consumer reported expenditure data rather than commercial disappearance data.

A Computational Approach to Finding Causal Economic Laws

This paper states four realities of econometric model buildingand shows that an econometric model can be causal only if theinterpretations given to its coefficients are consistent withthese realities. A numerically stable algorithm for estimatingsuch a model subject to equality and inequality constraints onthe model parameters is presented. This algorithm is designed insuch a way that it can be applied even when the matrix ofobservations on the models independent variables and thecovariance matrix of the models errors are deficient in rank.

An Effective Algorithm for the Noncentral Chi-Squared Distribution Function

Abstract A simple recursive algorithm is provided for evaluating the noncentral chi-squared distribution function. This algorithm basically reduces the problem to that of evaluating a single central chi-squared distribution function. The algorithm is summarized in a step-by-step form, and a good algorithm for evaluating the central chi-squared distribution function is also given in a step-by-step form.

Agricultural Profits and Farm Household Wealth: A Farm-level Analysis Using Repeated Cross Sections

This study examines the relationship between agricultural profits and farm household wealth across locations and farm sizes in U.S. agriculture. A multiperiod household model is used to develop hypotheses for testing. Results indicate that farmland has out-performed nonfarm investments over the past decade. Thus, households may want to keep their farmland to build wealth, even if it requires them to earn off-farm income. The analysis implies that decision will be made based on farm household wealth factors having little to do with agriculture.

Efficient computation of stochastic coefficients models

Paige (1979) has produced a reliable computational approach for solving the generalized linear least squares problem. This approach is used here to produce a numerically stable algorithm for computing stochastic coefficients models. This algorithm is well suited to these models because the matrices appearing in them may be singular and the algorithm is made to handle any rank deficiency.

Reciprocal Trade Agreements: Impacts on Bilateral Trade Expansion and Contraction in the World Agricultural Marketplace

The rapid increase in the number of bilateral and regional free-trade agreements since 1995 is a striking development. The proliferation of these agreements has raised questions about whether they have, in fact, opened markets, created trade, promoted economic growth, and/or distorted trade. This study uses panel data from 1975 to 2005 and a gravity framework model to identify the influence of reciprocal trade agreements (RTAs) on bilateral trade in the world agricultural marketplace. A benchmark, Heckman sample-selection and two generalized models, one of which accounts for RTA phase-in effects, are used to gauge the impact on partner trade of mutual as well as asymmetric RTA membership. Empirical results show that RTAs increase agricultural trade between member countries but decrease trade between member and nonmember countries. Interestingly, RTAs were found to be particularly effective at expanding agricultural trade and opening markets in developing countries when developing- country trading partners are part of the same agreement.

Forage Outsourcing in the Dairy Sector: The Extent of Use and Impact on Farm Profitability

The extent of forage purchasing behavior in milk production and its impact on profitability are analyzed using data from the 2000 and 2005 dairy versions of the Agricultural Resource Management Survey. Forage outsourcing is more common with hay than with silage and haylage, and is more prevalent in the western United States. Though silage and haylage outsourcing is found to impact profitability, the major profitability drivers appear to be farm size and efficiency. Evidence of significant forage contracting is found in the western United States.

Forecasting livestock prices: Fixed and stochastic coefficients estimation comparisons†

Agricultural commodity analysts have systematically overpredicted livestock prices during the 1980s by using econometric forecasting models that do not account for changing economic conditions. This article compares the out-of-sample forecast performance of the Swamy-Tinsley stochastic coefficients model with ordinary least squares, Cochrane-Orcutt, and maximum likelihood procedures that estimate red meat and chicken prices. The ability of a stochastic coefficients model to adapt quickly to changing economic conditions helps make it almost uniformly superior to a fixed coefficients model in forecasting the quarterly retail price for beef and chicken. The Cochrane-Orcutt and maximum-likelihood procedures appear to forecast pork prices better.

New versus old broiler housing technology: Which leads to greater profit?

&NA; The method of matching samples was used to compare the costs and returns associated with broiler housing technology using Agricultural Resource Management Survey data for 2006 and 2011. Farms with housing that included tunnel ventilation and evaporative cooling cells (new technology) were compared with farms with housing that did not include this technology (old technology). Gross farm income, total variable expenses, and total fixed expenses were higher for the new technology farms for both years. New technology farms had greater income over variable expenses and net cash farm income in both years.

A Bootstrap Estimator for Dynamic Optimization Models

We propose a technique for computing parameter estimates of dynamic and stochastic programming problems for which boundary conditions must be imposed. We demonstrate the feasibility of the technique by computing and interpreting the estimates of a dynamic food price margin model using secondary economic time series data.