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Abstract
The econometric estimation of e1asticities of factor demand in
Philippine agriculture is studied in this paper. The central purpose of this
work is to provide the parameters required for incorporation into a large,
applied general equilibrium model of the Philippine economy, known as
APEX. The values of these supply side parameters are crucial for the
performance of general equilibrium systems like APEX, but the econometric
literature offers several alternative possible methodologies for their
estimation. These include both primal and dual methods. The first objective
of this paper, therefore, is to attempt to discriminate a1ong these alternative
methodologies according to the predictive performance of the estimates that
they produce. A second objective is to exan1ine the sensitivity of the
resulting general equilibrium model to factor demand elasticity estin1ates
derived from these alternative methodologies by rr1eans of experiments on
the economic effects of technical change in Philippine agriculture.