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Die Nachfrage nach Butter. Eine ökonometrische Analyse

Heinz Gollnick
Weltwirtschaftliches Archiv
Bd. 74 (1955), pp. 81-106
Published by: Springer
Stable URL: http://www.jstor.org/stable/40435229
Page Count: 26
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Die Nachfrage nach Butter. Eine ökonometrische Analyse
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Abstract

The author undertakes to calculate the factors determining the demand for butter in Western Germany from January 1950 to March 1954. The amount of butter a household consumes in a certain period of time is determined by the price of butter, the prices of other goods, and the household's income level. Viewed from the individual household, there are unilateral causal relations between the amount of butter in demand, on the one hand, and the household's income and prices for other goods, on the other hand. If you examine the total of households in a national economy, you will generally not be able to arrive at the same result, for the simple reason that the offer of butter never is perfectly elastic. Consequently, there are several coexisting relationships between the quantitative demand for butter, the price for butter, and the other determining factors. Where more detailed information is not available you are, therefore, forced to regard both the quantities of butter offered and the price for butter as dependent factors. In which case undistorted coefficients of regression can only be calculated by means of the "maximum-likelihood method". In accordance with this method the constants in the demand and offer equations have here been calculated from a four-equations model. The "maximum-likelihood method", it should be noted, allows only of a purely descriptive appreciation of the inter-relations between the endogenous variables. For an analysis of the West-German butter market, however, it was possible to supplement this general system of simultaneous equations by additional information and thus to transform it into a system of recurrent equations, which may be interpreted as a special variety of the simultaneous model. The calculations carried through according to the two models have turned out practically identical results for the demand equation. It may therefore be said that the additional hypothesis introduced into the recurrent model seems to correspond to the reality. At the same it was possible to undertake a more detailed causal analysis with the aid of that system of recurrent equations. The recurrent model also made it possible to arrive at a final equation, from which undistorted coefficients of regression and elasticities of demand may be calculated according to the method of the smallest squares.

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