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GTAP Resource #4206

"Comparing PE and CGE Supply-Side Specifications in Models of the Global Food System"
by Robinson, Sherman, Dirk Willenbockel, Hans van Meijl and Hugo Valin

This paper compares the theoretical and functional specification of production in partial equilibrium (PE) and computable general equilibrium (CGE) models of the global agricultural and food system included in the AgMIP model comparison study. The two modeling approaches differ in the scope of economic activity they capture and how they represent technology and the behavior of supply and demand in markets. This paper compares their theoretical and empirical treatments of technology and supply. The CGE models are “deep” structural models in that they explicitly solve the maximization problem of producers, assuming profit maximization and neoclassical production/cost functions. The PE models divide into two groups on the supply side: (1) “shallow” structural models, which essentially specify supply curves with no explicit maximization behavior, and (2) “deep” structural models that provide a detailed specification of technology and optimizing behavior by producers. While the models differ widely in their specifications of technology, both within and between the PE and CGE classes of models, we find that the theoretical responsiveness of supply to changes in prices can be similar, depending on parameter choices that define the behavior of supply functions over the domain of applicability defined by the common scenarios used in the AgMIP comparisons. In particular, we compare the theoretical specification of crop yields and supply functions in CGE models with neoclassical production functions and PE models that focus on land and crop yields in agriculture. In practice, however, comparability of results given parameter choices is an empirical question, and the models differ in their sensitivity to variations in specification. To illustrate the issues, sensitivity analysis is done with one global CGE model, MAGNET, to indicate how the results vary with different specification of technical change, and how they compare with the results from PE models.

Resource Details (Export Citation) GTAP Keywords
Category: 2013 Conference Paper
Status: Published
By/In: Presented at the 16th Annual Conference on Global Economic Analysis, Shanghai, China
Date: 2013
Version: 2
Created: Robinson, S. (4/15/2013)
Updated: Robinson, S. (6/4/2013)
Visits: 2,741
- Calibration and parameter estimation
- Dynamic modeling
- Model validation and sensitivity analysis
- Climate impacts
- Land use
- Economic growth
- Technological change
- Agricultural policies
- Food prices and food security
- Not Applicable

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