Un modèle d'agrégation pour le secteur de l'alimentation animale du Benelux (original) (raw)

Cahiers d'Economie et de Sociologie Rurales (CESR), 1994

Abstract

An aggregator model for the Benelux animal feed sector. The aim of this paper is to analyze the price responsiveness of demand for feed inputs by the Benelux compound feed industries. Various sets of own- and cross-price elasticities are obtained from theoretically consistent feed input demand functions which are in turn derived from estimated cost functions. A large number of feed inputs is taken into account by assuming weak separability. This assumption allows for the use of aggregator functions and a two-stage econometric estimation procedure, thereby avoiding the problems of multicollinearity and lack of degrees of freedom which alternative procedures are usually facing. The total set of feed inputs is partitioned into four subsets, according to similarities in nutritional content : cereals, 'cereal substitutes', high protein feeds and additives. This study exploits the properties of the Symmetric Generalised McFadden (SGM) functional form as an alternative to the traditional Trans log function. Specifically, the SGM function has two attractive properties worth mentioning. First, the symmetry of the SGM function means that the analyst is not forced to single out one particular input to play an asymmetric role ; second, global curvature restrictions can easily be imposed, if necessary, without destroying the flexibility properties of the SGM function. Imposing global curvature properties is accomplished using the Cholesky decomposition. Complete elasticity matrices for the Belgian and Dutch compound feed sectors are reported and discussed in the article. From these matrices, a number of conclusions can be drawn : i) most quantities demanded for cereal and high protein feeds in the Netherlands are inelastic with respect to their own prices and substitutes among each other ; ii) similar results prevail for cereal substitutes and high protein feeds consumed in Belgium ; Hi) by contrast, demand for each cereal in this country tends to be very responsive to its own prices ; and iv) the demand for "additives" is very inelastic with respect to its own price.

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