An econometric estimation of the Swedish hog market : estimation of short and long run elasticites

Sammanfattning: The Swedish aggregated hog supply has been in a steadily decreasing trend during the last twenty years. In this paper the Swedish price supply relationship is examined to find elasticities for the market. The estimation of the supply function is made using AR (1) regression. The prices of inputs are made out of feed prices and the prices of output are the price paid to the producer. A risk variable is introduced to account for short term price fluctuations, however the risk variable shows no significance. The period that is studied is 1996-2015 and analyses quarterly data. The results suggest that the Swedish elasticities are in line with prior estimates in other hog markets in the world. The conclusion drawn is that the relationship between prices and supply are positive. Further research is proposed with further refined methods and more variables included to confirm the results of this paper.