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Functional Forms and Farm-Level Demand for Pecans by Variety

Published online by Cambridge University Press:  05 September 2016

Albert A. Okunade  and
Mark J. Cochran
Albert A. Okunade
Affiliation:
Department of Economics at Memphis State University, Memphis, Tennessee
Mark J. Cochran
Affiliation:
Rural Sociology at theUniversity of Arkansas, Fayetteville, Arkansas
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Abstract

Recent developments in the U.S. pecan industry appear to limit the utility of past research. The importance of pecan variety has emerged as an issue which could alter past results. The linear and double-log models previously fitted to all-pecans (averaged) data may be too restrictive and hence, are less useful for variety-specific analysis. Past research also analyzed price turning points using nominal data. This study investigated functional form and data-averaging problems by fitting separate flexible Box-Cox price-dependent models for all-pecans and each variety of pecans (1970/71-1988/89 deflated data). Results indicate: other nuts substitute for different pecan varieties, estimated all-pecans price flexibility is biased and clouds variety-specific flexibilities, and restrictive functional forms are inappropriate.

Keywords

flexible functional approximationsblend pecansBox-Cox estimationvarietiesprice flexibilitiesmisspecificationdemand
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 23 , Issue 2 , December 1991 , pp. 95 - 102
Copyright
Copyright © Southern Agricultural Economics Association 1991

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