MODELING STATE AGRICULTURE: AN APPLICATION AND SOME IMPLICATIONS

A disaggregated econometric model of the agricultural sector at the state level is constructed. Using time series data on West Virginia agriculture and three-stage least squares in estimation, the model is employed to examine how various components of the state's agricultural sector adjust to changes in certain price and nonprice variables. Results reveal characteristics of the state's agricultural economy that are both unique and useful - characteristics that are usually masked in aggregate models but that have profound implications for modeling producer decision making and policy formulation.