Agricultural Price Analysis
AGEC 756

NORTH CAROLINA A&T STATE UNIVERSITY
DEPT. OF AGRICULTURAL ECONOMICS AND RURAL SOCIOLOGY

Instructor: Dr. Godfrey C. Ejimakor
Office: 154-B Carver Hall; Phone 910-334-7943.
Office Hours: 9 - 10 am; 3 - 5pm MWF; 10 - 12 noon Tues.
Meeting Time: 1:00 - 2:20, MW
Meeting Place: 111 Carver Hall

Texts:

Goodwin, John W. Agricultural Price Analysis and Forecasting, John Wiley and Sons, New York, 1994 (Required).

William Tomek and Kenneth Robinson. Agricultural Product Prices, Cornell University Press, New York, 1981 (Optional).

Course Objective: The primary objective of the course is to familiarize students with the practice of price analysis using microeconomic theory and statistics. Examples will be given for different agricultural commodities. Various price estimation techniques will be discussed.

Grading: Grades will be assigned as follows:

Attendance 5%
Midterm Exam. 25%
Homework Assignments 20%
Term Paper 15%
Final 35%

Total 100%

I. Review of Consumer Demand Theory and Theory of the Firm.

Consumer Demand Theory, Theory of the Firm, Product and Input Demand Curves, The Role of Prices in a Free Market Economy, Aggregate Demand and Supply Curves, Changes in Quantity Demanded (Supplied) vs Changes in Demand(Supply).

II. Elasticities of Demand and Supply of Agricultural Products.

Price Elasticities and Flexibilities, Income Elasticities, Relations Between Elasticities, Marketing Margins and Farm-Retail Price Spreads, Relation Between Farm-Retail Price Elasticities, Longrun vs Shortrun Elasticities.

III. Market Structure and Price Determination Models.

Perfect Competition, Monopolistic Competition, Price Discrimination, Oligopoly, Duopoly.

IV. Empirical Models of Demand and Supply of Agric. Products.

Choice of Model, Choice of Functional Form, Cobweb Model, Distributed Lag Models, OLS vs Econometric Models, Choice Models, Hedonic Models.

REFERENCES

I. Review of Consumer Demand Theory and Theory of the Firm.

1. Tomek and Robinson, Chapters 1 & 2.

2. Doll J. P. and F. Orazem. Production Economics Theory with Applications, John Wiley and Sons, New York, 1978, Chapter 3.

3. Brewster, J. M. and H. L. Parsons. "Can Prices Allocate Resources in American Agriculture?" JFE, November 1946.

4. Cochrane, W. W. "The Market as a Unit of Inquiry in Agricultural Economics Research." JFE, February 1957.

5. Hayek, F. A. "The Use of Knowledge in Society." AER, September 1970.

6. Radford, R. A. "The Economic Organization of a P. O. W. Camp." Economica, Volume XII, 1945, pp. 189-201.

7. Mishan, E. J. "Theories of Consumer Behaviour: A Cynical View." Economica, February 1961, pp. 1-11.

8. Meilke, K. D. "Another Look at the Hog-Corn Price Ratio." AJAE, February 1977, pp. 184-191.

9. Gray, R. W. "The Changing Role of Prices." JFE, Number 46, 1964, pp. 117-127.

II.&III. Demand and Supply of Agricultural Products. Market Structure and Price Determination.

1. Tomek and Robinson, Chapters 3-6.

2. Houck, J. P. "The Relationship of Direct Price Flexibilities to Direct Price Elasticities." JFE, August 1965, pp. 789-792.

3. Green, R., Z. Hassan and S. R. Johnson. "Alternative Estimates of Static and Dynamic Systems for Canada."  AJAE, February 1978, pp. 93-107.

4. Frisch, R. "A Scheme for Computing All Direct and Cross Price Elasticites." Econometrica, April 1959, pp. 117-196.