Yves Surry

Global models of trade in agriculture: a review and assessment

The continuing process of global integration bears implications for farmers and related supplying and processing industries in all parts of the world, but also for the rest of the world economy. An assessment of agricultural and trade policy impacts is bound to be complex and is often supported by quantitative modeling analysis. This article provides an assessment of the present state of applied modelling in the area of trade and agricultural policies. We provide in this paper a comparative assessment of alternative modelling approaches, considering a total of 16 partial equilibrium and general equilibrium models. The assessment includes theoretical modelling foundations, datasets employed and institutional aspects, such as model maintenance and dissemination of results. A typology of models is provided by structuring the assessment along a clear set of evaluation criteria.

Incorporating Price-Induced Innovation in a Symmetric Generalised McFadden Cost Function with Several Outputs

This paper proposes a multiple-output Symmetric Generalised McFadden (SGM) cost function, incorporating both exogenous and endogenous technological change. Whilst exogenous technological change is captured by the usual time trend, endogenous or price-induced technological change is cast within a partial-adjustment framework involving lagged input prices. The study points to various dimensions or components of technological change, and allows to disentangle “pure” factor substitution, given the state of the technology, from factor substitution due to price-induced changes in technology. Under the conditions of non-jointness in input quantities, the model further allows to identify technological change biases for each output separately. An empirical application is presented in which the proposed model is applied to time-series data on the feed manufacturing industry in Belgium. To improve on the econometrics, the SGM cost function also incorporates linear splines.

The Fast Decay Process in Outdoor Recreational Activities and the Use of Alternative Count Data Models

Despite a number of significant advances in count data modeling during the last two decades and the growing popularity of these models in recreation demand analysis, standard count data models are inadequate to address the fast decay process of the dependent variable and the associated long tail. This article demonstrates how one and two-parameter alternative count data models can be used to properly model the fast decay process and the associated long tail commonly observed in recreation demand analysis. Econometric results from an illustrative application suggest satisfactory performance of four of the eight alternative count data models proposed in this article.

Testing alternative dynamic specifications: an application to meat demand in Belgium

This letter examines alternative specifications of dynamic adjustment in the context of a linear approximate AIDS model of the demand for meat in Belgium. The model also incorporates demographic variables to account for structural changes in consumer preferences. Using a general first-order ECM specification as a unifying analytical framework, several tests are performed in an attempt to validate the preferred dynamic model specification. The results indicate that the widely-used dynamic model with one adjustment parameter (diagonal adjustment matrix) as well as the autoregressive and static models are strongly rejected by the data. The proposed symmetric specification of dynamic adjustment presents a viable alternative.

Incorporating Technological Change in the Demand for Formula Feed in France

This paper deals with the issue of incorporating technological change into economic analysis. The problem chosen to illustrate the idea is the demand for formula hog feed in France. Estimates of formula feed demand play an important part in a more complete model of the French feed concentrate market (Surry). The complete model explains and projects the future demand for soybean meal. This demand depends crucially on the rate of expansion in formula feed use because, in France, most soybean meal is purchased as part of a complete or supplement feed mix. Although only one example is given, the technique seems sufficiently general for use in other situations. Economic theory suggests that the diffusion of new agricultural technology has changed price levels, efficiency of production, and substitution patterns among commodities. The introduction of least-cost feed mixing, increased awareness of animal nutrition among farmers, vertical integration, and modern merchandising techniques have served to expand the demand for formula feeds. Representing these diverse influences with a simple linear trend is clearly inappropriate because the market for formula feed does not, and can not, expand at a constant rate. However, the differential rate of growth in the formula feed industry can be incorporated in a derived demand function with variational parameter techniques (Maddala). These techniques and their application to the formula feed industry are the subject of this paper.