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An Application of the Rational Expectations Hypothesis in the U.S. Beekeeping Industry

Published online by Cambridge University Press:  10 May 2017

Lois Schertz Willett
Lois Schertz Willett*
Affiliation:
Department of Agricultural Economics, Cornell University
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Abstract

A national beekeeping-industry model, assuming rational expectations, is presented.

Consistent and asymptotically efficient estimates are obtained by a modified two-step two-stage least squares method. Based on parameter estimates, elasticities, and likelihood functions, a previously estimated modified adaptive expectations model explains industry behavior better than the rational expectations model. Simulation analyses of the models suggest the direction of the impacts of an ineffective federal honey support program from 1982 through 1985 is similar but the magnitudes are varied. The rational expectations model indicates the decrease in beekeepers’ revenue in this period is larger than the decrease identified by the modified adaptive expectations model.

Type
Articles
Information
Northeastern Journal of Agricultural and Resource Economics , Volume 20 , Issue 2 , October 1991 , pp. 189 - 201
Copyright
Copyright © 1991 Northeastern Agricultural and Resource Economics Association 

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Footnotes

This research was partially funded by the Giannini Foundation of Agricultural Economics. The author appreciates helpful comments from Richard Boisvert, Ben French, Harry Kaiser, Steven Sheffrin, and two anonymous reviewers. The author is solely responsible for the views expressed here and for any remaining errors.

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