Title: Transactions Costs and Agricultural Household Supply Response
Notes: Build on an AHM of household supply to either market or home consumption and estimate it for only maize using Mexican data. It does allow for a simultaneous choice of production and consumption. They jointly estimate three regimes of (buyer, seller, autarky) by tacking on errors to the three theoretically derived equations. They estimate the parameters by maximum likelyhood by assuming the errors in the 5 equations they end up with are ~ I.N.D. Funny to see them refer to identification in this paper as the ability to identify separate parameters within a model (as oppose to producing estimates of their product for example) while the now it seems identification is more associated with causation. See Angrist and Pischke's book for a good discussion.
Their Abstract: "We develop and estimate a model of supply response when transactions costs create a situation where some producers buy, others sell, and others do not participate in markets. We present two rationales for why producing households may have different relationships to the market: proportional and fixed transactions costs. Using data on Mexican corn producers, we estimate an empirical model that allows for separate tests of the significance of both types of transactions costs, revealing that both fixed and proportional transactions costs matter for the estimation. The results provide consistent estimates of supply elasticity and measures of the relative importance of factors determining both proportional and fixed transactions costs."
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