Todd E. Petzel

Market Integration: An Application to International Trade in Cotton

Agricultural commodities are differentiated frequently by quality or country of origin. This paper proposes two complementary tests—bivariate price regressions and hedonic index estimation—as methods to identify whether differentiated products are amenable to treatment as a homogenous commodity. These price linkage tests represent necessary, rather than sufficient, conditions for aggregation and must be supplemented by information on market structure. Analysis of the international cotton market suggests a distinction between extra long and other staple lengths, but not by country of origin after controlling for staple length.

The Role of Education in the Dynamics of Supply

This paper offers a synthesis of Nerlovian supply dynamics and the recent work on the role of education in entrepreneurial decision making. The model is tested by looking at the dynamics of soybean supply for U.S. counties from 1947 to 1973. Rates of adjustment to long-run equilibrium are found to depend on several variables, including education of the decision maker.