Estimating supply response of the CAPRI crop sector CAPRI
Estimating supply response of the CAPRI crop sector CAPRI
Estimating supply response of the CAPRI crop sector CAPRI
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<strong>CAPRI</strong><br />
Pre-test 1: endogenous input use<br />
<strong>CAPRI</strong><br />
• If yield is a quadratic function <strong>of</strong> input use,<br />
<strong>the</strong>n yields are linear functions <strong>of</strong> square <strong>of</strong> price ratio,<br />
r ij = w i /p j<br />
• We estimate, using iterated SUR for all EU15 regions,<br />
Y<br />
jt<br />
= 0 j + β 1 jTt<br />
+ β 2 j x jt + ∑<br />
i<br />
β β r +<br />
3ij<br />
2<br />
ijt<br />
ε<br />
it<br />
and test for β 3 = 0<br />
• Result too weak (10% <strong>of</strong> equations significant)<br />
7<br />
DYNASPAT final meeting, Brussels, February 27, 2007
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