Analytical Capabilities

Partial Equilibrium Modeling

Structural agricultural econometric model building is the process of building an economic model of a particular commodity or set of commodities for a particular country or region.  Large countries are often broken down into regions following political boundaries.  Policy makers use these types of models to simulate the impacts of alternative policies, macroeconomic events, weather events, and technologies on their agricultural sector.  These models can also be designed to measure the aggregate impacts on consumer and producer welfare.  Depending on the timeline allowed for the project, these models will typically involve a combination of estimated and synthetic (based on elasticities from other studies) behavioral equations, combined with basic identities form the basis of a system of simultaneous equations.  This system ultimately equates supply and demand to solve for a price equilibrium for the commodity of interest.   This capability is often used by governments and occasionally private business who want to invest in proprietary econometric models that they can use for their own purposes.  Frequently, clients also ask for standard maintenance of these models including the update of historical data, structural modification of the model for new policies or other changes, workshops to train personnel, etc.   Clients have the opportunity to participate in the development process and shape the analytical capabilities of the resulting econometric modeling system.