AN APPROACH TO UNIQUE SOLUTIONS FOR CONSTANT-ELASTICITY COMMODITY MODELS

Unique solutions are more difficult to guarantee for commodity models that have nonlinear simultaneous equations than for those with linear ones. The nonlinear case requires determination of uniqueness before a solution is attempted while uniqueness in the linear case is determined as a byproduct of the solution procedure. Unique solutions are important because they are necessary for unambiguous results (that is, results that can always be duplicated). This article explains an approach for guaranteeing unique solutions for commodity models specified with a nonlinear equation type often used in economics, the constant-elasticity equation. This choice allows researchers the option of using secondary data sources (parameter estimates) in developing commodity models.