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Modeling Long-term Commodities: the Development of a Simulation Model for the South African Wine Industry within a Partial Equilibrium Framework*

Published online by Cambridge University Press:  08 June 2012

Sanri Reynolds ,
Ferdinand Meyer ,
Michela Cutts  and
Nick Vink
Sanri Reynolds
Affiliation:
Department of Agriculture: Western Cape, Private Bag XI, Elsenburg, 7607,South Africa. E-mail: sanrir@elsenburg.com
Ferdinand Meyer
Affiliation:
Department of Agricultural Economics, Extension and Rural Development, University of Pretoria, Pretoria, 0001,South Africa. E-mail: Ferdi.meyer@up.ac.za
Michela Cutts
Affiliation:
South African Sugar Association (SASA), P.O. Box 700, Mount Edgecombe, 4300,South Africa. E-mail: michela.cutts@sasa.org.za
Nick Vink
Affiliation:
Department of Agricultural Economics, University of Stellenbosch, Private Bag XI; Matieland, 7602,South Africa. E-mail: nv@sun.ac.za (corresponding author)
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Abstract

Econometric demand and supply models of agricultural commodities and crops have been around for a long time with extensive research and adaptations being made in the grain and livestock sectors. This much attention has, however, not been afforded to long term commodities. This paper presents a partial equilibrium framework for modeling long term commodities using the South African wine industry as an example. The model structure is presented and two different approaches to closing the model are compared. The usefulness of the model is tested in the form of baseline projections and the analysis of a typical “what if” question. (JEL Classification: D5, L66, Q11)

Type
Articles
Information
Journal of Wine Economics , Volume 4 , Issue 2 , Winter 2009 , pp. 201 - 218
Copyright
Copyright © American Association of Wine Economists 2009

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