SIMULTANEOUS EQUATION ECONOMETRICS: THE MISSING EXAMPLE |
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| Authors: | DENNIS EPPLE BENNETT T MCCALLUM |
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| Institution: | Epple:;Lord Professor of Economics, Tepper School, Carnegie Mellon University, Pittsburgh, PA 15213. Phone 1-412-268-1536, Fax 1-412-268-6830, E-mail McCallum:;H. J. Heinz Professor of Economics, Tepper School, Carnegie Mellon University, Pittsburgh, PA 15213. Phone 1-412-268-2347, Fax 1-412-268-6830, E-mail |
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| Abstract: | For introductory presentation of issues involving simultaneous equation systems, a natural vehicle consists of supply and demand relationships for a single good. One would expect to find in econometrics textbooks a supply-demand example featuring actual data in which structural estimation methods yield more satisfactory results than does ordinary least squares. But a search of 26 existing textbooks finds no example with actual data in which all crucial parameter estimates are of the proper sign and are statistically significant. The present article accordingly develops a simple but satisfying example, for broiler chickens, based on U.S. annual data from 1960 to 1999. (JEL C30 ) |
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