ACREAGE RESPONSE, EXPECTED PRICE FUNCTIONS, AND ENDOGENOUS PRICE EXPECTATIONS

Taking the price of futures as a proxy for expected price, this article treats acreage planted to soybean, the price of futures, and other variables as jointly dependent. A futures price equation is embedded in a simultaneous equations model along with the consumption demand and acreage response. The model is estimated using both ordinary and three-stage least squares. Estimated price elasticities for consumption demand, demand for stocks, and acreage response equal, respectively, -.5, -1.8, and +.2 (short run) and +.59 (long run).
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Choi, Jung-Sup; Helmberger, Peter G., ACREAGE RESPONSE, EXPECTED PRICE FUNCTIONS, AND ENDOGENOUS PRICE EXPECTATIONS, Journal of Agricultural and Resource Economics, Volume 18, Issue 1, July 1993, Pages 37–46

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