Estimating price elasticities of supply for cotton: a structural time-series approach

Year of publication2006

AuthorFAO

PublisherFAO

AbstractThe Kalman Filter is used to estimate a structural time-series model of cotton supply for 30 countries and 16 aggregated regions. Estimated short run supply elasticities with respect to the world price are presented for all 46 countries and regions. While they are broadly within the expected range in light of previous work, they indicate extensive cross-country and regional heterogeneity, as well as considerable parameter uncertainty in some cases. Finally, some proposals are made for incorporating both the core estimates and their sampling distributions into applied equilibrium models.

 

Product typeBook (stand-alone)

SeriesFAO Commodity and Trade Policy Research Working Paper

Areas of workTrade Policy and Partnerships

KeywordsCotton; price elasticity of supply; structural time-series model; Kalman Filter.