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eth
2012 Mar 22
1
Simalteneous Equation Doubt in R
...7 exogenous variables
(P(sm)t,Bt,COFt,D1,D2,D3)
Export equation:
EXt= c0+c1Pt+c2EXt-1+c3Wt+c4DXt+c5GDPt+c6D1+c7D2+c8D3+U3 -(3)
here there are 2 endogenous variable(EXt, Pt) & 7 exogenous variables (EX
t-1,Wt,DXt,D1,D2,D3)
Food, Alcohol, Industry (FAI) Demand Equation:
FAIt= d0+d1Pt+d2Etht+d3Popt+d4Tt+d5D1+d6D2+d7D3+U4 -(4)
here there are 2 endogenous variable(FAIt, Pt) & 6 exogenous variable(Eth
t,Popt,Tt,D1,D2,D3)
Price Equation: price of corn is determined by supply and demand
simultaneously, following is the reduced form equation:
Pt=µ0+µ1St+µ2Ft+µ3EXt+µ4FAIt+µ5Pt-1+µ...