COINTEGRATION BETWEEN U.S. WHEAT MARKETS

ABSTRACT. Average monthly price data from twelve hinterland markets and the Houston port price for wheat are studied in a cointegration framework using the Engle-Granger "two-step" procedure and Johansen's maximum likelihood procedure. Out-of-sample forecasts from an error correction model are compared to those from a vector autoregression fit to levels and a univariate autoregression fit to first differences. This comparison suggests that modeling these (cointegrated) data as a levels vector autoregression, rather than as an error-correction process, results in significantly higher error bias, but lower error variance, at long horizons.     

LAND USE IN THE PRESENCE OF AN ATMOSPHERE EXTERNALITY,WITH AND WITHOUT CORRECTIVE TAXES*

ABSTRACT. Total cleared area in a von Thünen land-use model drives an atmosphere externality which depresses agricultural productivity uniformly throughout the region. Exogenous events that encourage clearance and use of a larger cultivated area (output price or population increase) exacerbate the externality. Imposition of a simple, corrective tax on land rents does not reverse these patterns but does mitigate the increase in the externality and leaves cultivators with higher incomes than they would obtain without the tax. We examine an optimal tax on land rents, designed to maximize the social value of land rents in the region, and an output tax.     

Net migration estimation in an extended,multiregional gravity model

A multi-regional framework is developed in order to analyze net migration over time to all 10 Canadian provinces within an integrated system of equations. "An extended gravity model is the basis for the equation specification and the use of constrained econometric estimation techniques allows for the provincial interdependence of the migration decision while at the same time ensuring that an important system-wide requirement is respected." The model is estimated using official Canadian data for the 1960s and 1970s. "The results suggest the predominance of the push factor for interprovincial migration for most provinces, although net migration to the Atlantic provinces is also shown to be subject to pull forces from the rest of the country." The effects of wage rate variables, unemployment, and political disturbances in Quebec on inter-provincial migration are noted.