Estimating investment rigidity within a threshold regression framework: The case of U.S. hog production sector

Brenda L. Boetel; Ruben Hoffmann; Donald J. Liu

doi:10.1111/j.1467-8276.2007.00961.x

Estimating investment rigidity within a threshold regression framework: The case of U.S. hog production sector

Brenda L. Boetel, Ruben Hoffmann, Donald J. Liu

Research output: Contribution to journal › Article › peer-review

20 Scopus citations

Abstract

This article addresses the issues of investment/disinvestment asymmetry and a possible existence of a sluggish regime in the demand for a quasi-fixed input in the U.S. hog production sector. Adopting a new threshold estimation procedure, quarterly data from 1970 through 2002 are used to estimate a regime-dependent investment demand equation for a quasi-fixed input, taking sows as a proxy. The results support the existence of three regimes over alternative specifications precluding the sluggish regime, confirming the existence of asset fixity in hog production. The results also highlight the importance of accounting for investment rigidity when estimating hog supply and variable input demands.

Original language	English (US)
Pages (from-to)	36-51
Number of pages	16
Journal	American Journal of Agricultural Economics
Volume	89
Issue number	1
DOIs	https://doi.org/10.1111/j.1467-8276.2007.00961.x
State	Published - Feb 2007
Externally published	Yes

Bibliographical note

Funding Information:
Senior authorship is not assigned. Funding for this project was provided by the Minnesota Agricultural Experiment Station (MIN-14-057). The authors also wish to acknowledge the generous support for travel for Ruben Hoffmann from the Center for International Food and Agricultural Policy, University of Minnesota.

Keywords

Asset fixity
Inaction regime
Investment asymmetry
Threshold model

Access

10.1111/j.1467-8276.2007.00961.x

OpenUrl availability

Full text

Cite this

@article{efafda3c329a47cbb2b216e9c55a8bf9,

title = "Estimating investment rigidity within a threshold regression framework: The case of U.S. hog production sector",

abstract = "This article addresses the issues of investment/disinvestment asymmetry and a possible existence of a sluggish regime in the demand for a quasi-fixed input in the U.S. hog production sector. Adopting a new threshold estimation procedure, quarterly data from 1970 through 2002 are used to estimate a regime-dependent investment demand equation for a quasi-fixed input, taking sows as a proxy. The results support the existence of three regimes over alternative specifications precluding the sluggish regime, confirming the existence of asset fixity in hog production. The results also highlight the importance of accounting for investment rigidity when estimating hog supply and variable input demands.",

keywords = "Asset fixity, Inaction regime, Investment asymmetry, Threshold model",

author = "Boetel, {Brenda L.} and Ruben Hoffmann and Liu, {Donald J.}",

note = "Funding Information: Senior authorship is not assigned. Funding for this project was provided by the Minnesota Agricultural Experiment Station (MIN-14-057). The authors also wish to acknowledge the generous support for travel for Ruben Hoffmann from the Center for International Food and Agricultural Policy, University of Minnesota.",

year = "2007",

month = feb,

doi = "10.1111/j.1467-8276.2007.00961.x",

language = "English (US)",

volume = "89",

pages = "36--51",

journal = "American Journal of Agricultural Economics",

issn = "0002-9092",

publisher = "Oxford University Press",

number = "1",

}

TY - JOUR

T1 - Estimating investment rigidity within a threshold regression framework

T2 - The case of U.S. hog production sector

AU - Boetel, Brenda L.

AU - Hoffmann, Ruben

AU - Liu, Donald J.

N1 - Funding Information: Senior authorship is not assigned. Funding for this project was provided by the Minnesota Agricultural Experiment Station (MIN-14-057). The authors also wish to acknowledge the generous support for travel for Ruben Hoffmann from the Center for International Food and Agricultural Policy, University of Minnesota.

PY - 2007/2

Y1 - 2007/2

N2 - This article addresses the issues of investment/disinvestment asymmetry and a possible existence of a sluggish regime in the demand for a quasi-fixed input in the U.S. hog production sector. Adopting a new threshold estimation procedure, quarterly data from 1970 through 2002 are used to estimate a regime-dependent investment demand equation for a quasi-fixed input, taking sows as a proxy. The results support the existence of three regimes over alternative specifications precluding the sluggish regime, confirming the existence of asset fixity in hog production. The results also highlight the importance of accounting for investment rigidity when estimating hog supply and variable input demands.

AB - This article addresses the issues of investment/disinvestment asymmetry and a possible existence of a sluggish regime in the demand for a quasi-fixed input in the U.S. hog production sector. Adopting a new threshold estimation procedure, quarterly data from 1970 through 2002 are used to estimate a regime-dependent investment demand equation for a quasi-fixed input, taking sows as a proxy. The results support the existence of three regimes over alternative specifications precluding the sluggish regime, confirming the existence of asset fixity in hog production. The results also highlight the importance of accounting for investment rigidity when estimating hog supply and variable input demands.

KW - Asset fixity

KW - Inaction regime

KW - Investment asymmetry

KW - Threshold model

UR - http://www.scopus.com/inward/record.url?scp=33846929699&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=33846929699&partnerID=8YFLogxK

U2 - 10.1111/j.1467-8276.2007.00961.x

DO - 10.1111/j.1467-8276.2007.00961.x

M3 - Article

AN - SCOPUS:33846929699

SN - 0002-9092

VL - 89

SP - 36

EP - 51

JO - American Journal of Agricultural Economics

JF - American Journal of Agricultural Economics

IS - 1

ER -

Estimating investment rigidity within a threshold regression framework: The case of U.S. hog production sector

Abstract

Bibliographical note

Keywords

Access

OpenUrl availability

Other files and links

Fingerprint

Cite this