Simulated maximum likelihood estimation of demand systems with corner solutions and panel data application to industrial energy demand

Chakir, Raja; Thomas, Alban

doi:10.3917/redp.136.0773

Cited by 7 publications

(2 citation statements)

References 23 publications

(23 reference statements)

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“…Our micro-economic crop acreage choice model is an example of ERS multivariate model with multiple regimes. To our knowledge, ERS models for multiple choices have been mostly used for demand systems, either for consumption goods (e.g., Wales and Woodland, 1983;Lee and Pitt, 1986;Kao et al, 2001;Millimet and Tchernis, 2008) or for production factors (e.g., Lee and Pitt, 1987;Arndt, 1999: Chakir andThomas, 2003). Most of these studies rely on the dual modelling framework proposed by Lee and Pitt (1986).…”

Section: Corners Kinks and Jumps In Acreage Choice Modelsmentioning

confidence: 99%

Modeling Corners, Kinks, and Jumps in Crop Acreage Choices: Impacts of the EU Support to Protein Crops

Koutchade¹,

Carpentier²,

Femenia³

2020

American J Agri Economics

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Null crop acreages raise pervasive issues when modelling acreage choices with farm data. We revisit these issues and emphasize that null acreage choices arise not only due to binding nonnegativity constraints but also due to crop production fixed costs. Based on this micro-economic background, we present a micro-econometric multi-crop model that consistently handles null acreages and accounts for crop production fixed costs. This multivariate endogenous regime switching model allows for specific crop acreage patterns, such as multiple kinks and jumps in crop acreage responses to economic incentives, that are due to changes in produced crop sets. Currently available micro-econometric multi-crop models, which handle null acreages based on a censored regression approach, cannot represent these patterns. We illustrate the empirical tractability of our modelling framework by estimating a random parameter version of the proposed endogenous regime switching micro-econometric multi-crop model with a panel dataset of French farmers. Our estimation and simulation results support our theoretical analysis, the effects of crop fixed costs and crop set choices on crop acreage choices in particular. More generally, these results suggest that the micro-econometric multicrop model presented in this article can significantly improves empirical analyses of crop supply based on farm data.

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Section: Corners Kinks and Jumps In Acreage Choice Modelsmentioning

confidence: 99%

Modeling Corners, Kinks, and Jumps in Crop Acreage Choices: Impacts of the EU Support to Protein Crops

Koutchade¹,

Carpentier²,

Femenia³

2020

American J Agri Economics

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“…These methods include method of simulated moments, method of simulated maximum likelihood, and method of simulated scores. The simulated ML approach is applied by Kao et al (2001) and Chakir and Thomas (2003). Another way to overcome the computational issue is to use Bayesian methods.…”

Section: Introductionmentioning

confidence: 99%

Unintended Consequences of Environmental Policies: the Case of Set-aside and Agricultural Intensification

Chakir

Thomas

2022

Environ Model Assess

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Set-aside policies providing agronomic and ecological benefits have been mainstream practices in European agriculture. Because they may lead to intensification on cultivated land, they can however have mixed environmental effects. To evaluate the indirect impact of a set-aside policy on crop intensification, we consider two elasticity indicators with respect to set-aside subsidy: chemical input demand and intensity of input use. We estimate a structural, multi-output model on a panel of French farmers from 2006 to 2010, accounting for multivariate selection (corner solutions) on crops and land use, with a semi nonparametric Quasi-Maximum Likelihood estimator robust to deviations from normality and homoskedasticity. Results show that a set-aside subsidy can provide farmers with incentives to intensify their production, leading to potential adverse environmental effects that can however be offset by a complementary tax policy instrument.

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Estimates of inter-fuel substitution possibilities in Chinese chemical industry

Lin

Wesseh

2013

Energy Economics

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Simulated maximum likelihood estimation of demand systems with corner solutions and panel data application to industrial energy demand

Cited by 7 publications

References 23 publications

Modeling Corners, Kinks, and Jumps in Crop Acreage Choices: Impacts of the EU Support to Protein Crops

Modeling Corners, Kinks, and Jumps in Crop Acreage Choices: Impacts of the EU Support to Protein Crops

Unintended Consequences of Environmental Policies: the Case of Set-aside and Agricultural Intensification

Estimates of inter-fuel substitution possibilities in Chinese chemical industry

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