Econometrica: Jan 1974, Volume 42, Issue 1
Methods of Estimation for Markets in Disequilibrium: A Further Study
Harry H. Kelejian, Ray C. FairThis paper is concerned with the problem of estimating demand and supply schedules in disequilibrium markets. The results of Fair and Jaffee are expanded in three ways. (1) Their directional method I is modified to yield consistent estimates. (2) A maximum likelihood alternative to their quantitative method is proposed. (3) The price equation is generalized to be a multivariate, stochastic function, and a method is proposed for estimating demand and supply schedules in this case.
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