A THEORETICAL AND EMPIRICAL INVESTIGATION OF THE SUPPLY RESPONSE IN THE U.S. BEEF-CATTLE INDUSTRY

This paper investigates the response of beef cattle producers to changes in the price of cattle. Previous research has suggested that there may be a negative short-run supply response to a permanent increase in the price of cattle. We build a dynamic, rational expectations model that predicts that the supply response is generally positive, even for permanent shocks in the short run, and nests the negative supply response as a special case for appropriately restricted demand shocks. Using annual US time series data (1930-1997) and a simultaneous-equations econometric approach, we find a positive short-run supply response in the cow market and mixed evidence in the heifer market.


Issue Date:
2000
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/21887
Total Pages:
26
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2017-08-24

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