Kiel Working Papers, Kiel Institute for World Economics
No 1016:
Estimating the Aggregate Agricultural Supply Response: A Survey of Techniques and Results for Developing Countries
Rainer Thiele
Abstract: For many low-income countries, the impact of structural
reforms on economic growth and poverty alleviation crucially depends on the
response of aggregate agricultural supply to changing incentives. Despite
its policy relevance, the size of this parameter is still largely unknown.
This paper discusses the different approaches which may be employed to
quantify the agricultural supply response. It turns out that none of these
approaches is likely to deliver unbiased estimates. While in cross-country
regressions the problem of unobserved country characteristics cannot be
fully eliminated, time-series estimations tend to suffer from the Lucas
critique. Any comprehensive empirical analysis should thus rely on more
than one technique in order to check the robustness of results.
Keywords: agricultural supply response, cross-country regressions, Nerlove method, co-integration, dynamic general equilibrium analysis.; (follow links to similar papers)
JEL-Codes: C21; C22; Q11; (follow links to similar papers)
22 pages, December 2000
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