An Economic Analysis Of The Desirability Of Another Tree Nut Marketing Order Pecans

Author : Hardev Singh Dhaliwal
Publisher :
ISBN 13 :
Total Pages : 370 pages
Book Rating : 4.:/5 (123 download)

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Download or read book An econometric investigation of demand interrelationships among tree nuts and peanuts written by Hardev Singh Dhaliwal and published by . This book was released on 1972 with total page 370 pages. Available in PDF, EPUB and Kindle. Book excerpt: Edible tree nut and peanut industries are important agricultural industries in the United States. Major tree nuts produced domestically are almonds, filberts, pecans, and walnuts. The United States imports and exports some quantities of these tree nuts and peanuts, but at the same time the U.S. imports cashew, brazil, pignolia, and pistachio nuts which are not domestically produced. Tariffs on imported nuts are imposed, and there are marketing orders or other programs which are in operation in the marketing of several of the domestically produced nuts. Demand interrelationships between nuts are of importance for pragmatic policy formulation for tariffs for imported nuts and marketing control of domestically produced nuts. The overall objective of the study was to formulate and test economic hypotheses of related demands for eight tree nuts and peanuts, thereby classifying them into categories of substitutes, complements, and independents in demand. The U.S. consumption data on tree nuts and peanuts for the years 1947-68 were used for analysis purposes. All the nuts were converted on a shelled basis by using appropriate shelling ratios. Adjustments were made for missing inventories. Results of other studies relevant to this study were investigated and were modified. In order to achieve the overall objective, different econometric models employing the single stage least squares (OLS) approach were used for estimation purposes. A double precision and an extended precision; stepwise, time series, correlogram, and autoregressive transformation algorithms were used for analysis purposes. Stability conditions for estimated demand curves using the Chow-test were tested, and the demand curves were found to be stable over the time period of this study. According to the Kamien-condition, interrelated demands were identified. Tests of the severity of multicollinearity were performed. Second-order autoregressive scheme in the time series data employed was detected by the use of correlograms algorithm and a second-order autoregressive transformation was made to arrive at efficient estimates of the parameters. The study revealed that theoretical hypotheses of the ordinal theory of related demands such as the "Hotelling-condition," and the "Slutsky-Friedman condition," were, in general, inconclusive as a method of classifying tree nuts and peanuts as substitutes, complements and independents in demand. However, pecans and walnuts, pecans and brazil nuts, brazil nuts, and cashews were found to be substitutes; whereas almonds and filberts, pecans and pistachios were complements in demand. Except for some nuts with conflicts in signs, all other nuts were found to be statistically nonsignificant, and therefore, may be classified as independents in demand.