FUNCTIONAL FORMS AND THE DEMAND FOR MEAT IN THE UNITED STATES: A REPLY.

The article presents response of the author to the comments made by economists Cliff J. Huang and Oliver R. Grawe, to his article related to functional forms and the demand for meat in the United States. Huang and Grawe had demonstrated that a difference existed between the conditional mean function...

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Publicado en:Review of Economics & Statistics Vol. 62; no. 1; pp. 148 - 151
Autor principal: Hui-Shyong Chang
Formato: Artículo
Publicado: MIT Press Feb80
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: FUNCTIONAL FORMS AND THE DEMAND FOR MEAT IN THE UNITED STATES: A REPLY.
      aug:
        au: Hui-Shyong Chang
        affil: University of Tennessee.
      su:
        Demand function
        Economic demand
        Meat industry
        Elasticity (Economics)
        Huang, Cliff J.
        Grawe, Oliver R.
        Regression analysis
        Economic forecasting
        United States
      sug:
        subj:
          United States
          Demand function
          Economic demand
          Meat industry
          Elasticity (Economics)
          Huang, Cliff J.
          Grawe, Oliver R.
          Regression analysis
          Economic forecasting
      ab: The article presents response of the author to the comments made by economists Cliff J. Huang and Oliver R. Grawe, to his article related to functional forms and the demand for meat in the United States. Huang and Grawe had demonstrated that a difference existed between the conditional mean function and the deterministic part of the author's estimation of the elasticity of the demand for meat. According to the author, the derivation of Huang and Grawe that the disturbance term in the Box-Cox equation is truncated and not strictly normal is correct. Therefore, a difference distorting the elasticity might exist if the maximum likelihood method is used to estimate the parameters. However, for certain economic relationships, the normality assumption is a good approximation, and the difference due to the approximation is tolerable. Moreover, this difference is the result of the disturbance term in the Box-Cox procedure being truncated, which causes the violation of the assumption of the normality of the disturbance term.
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      src: R
    language: English
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