Equilibrium Displacement Mathematical Programming Models: Methodology and a Model of the U.S. Agricultural Sector

by David H Harrington and Robert Dubman

The objective of this research is to extend and generalize the equilibrium displacement methodology by combining it with mathematical programming methods and existing knowledge of farm sector relationships to develop sectoral adjustment models that can operate in pure competition, monopoly/monopsony, or mixed-competition. A model of the U.S. agricultural sector at the national aggregate level is presented to illustrate the methods. An appendix contains a user's manual describing the operation of the model. Further appendices contain documentation of the structure of the spreadsheets, the programming tableau, and the SAS solution program.

Keywords: Equilibrium displacement models, positive mathematical programming, U.S. farm programs, direct payments, counter-cyclical payments, loan deficiency payments, conservation reserve

In this publication...

• Entire Report
• Abstract, Contents
• Summary
• Introduction
• EDMP Methodology
• Modeling the Supply Side
• Modeling the Demand Side
• Modeling Agricultural Policies and Programs
• Model Calibration
• What Do Gradients Mean?
• Structure of the Model
• Solving the Model
• Supply Parameters
• Implicit Acreage- and Supply-Response Elasticities
• Demand Parameters
• Government Program Parameters
• Post-Optimal Calculations of Performance Variables
• References
• Appendix I: User's Manual
• Appendix II: The SAS Excel Link Program
• Appendix III: Model Spreadsheets