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Judge, George G., W. E. Griffiths, R. Carter Hill, Helmut Lütkepohl, and Tsoung‐Chao Lee. The Theory and Practice of Econometrics, 2nd ed. New York: John Wiley … Sons, 1985, xxix + 1,019 pp., $@@‐@@46.95

Judge, George G., W. E. Griffiths, R. Carter Hill, Helmut Lütkepohl, and Tsoung‐Chao Lee. The... 454 May 1985 Amer. J. Agr. Econ. ing in many countries around the world. Johnson trade model seems a bit disjointed from other parts the preface and contends it is of the chapter. However, the section on product acknowledges this in differentials is excellent. It helps explain how and oflittle consequence since the book's objective is to focus on the workings and effects of U.S. govern­ why U.S. flue-cured and burley farmers were suc­ cessful, for many years, in exporting large quan­ ment farm policy regarding tobacco. A narrower, tities of their tobacco while simultaneously enjoy­ more descriptive title (e.g., "Economics of U.S. ing the benefits of only nominal quantities of im­ Flue-Cured Tobacco Production and Marketing in an Era of Government Price Supports") would ports. Specific insights are advanced as to why im­ ports have increased so rapidly in recent years, please purists who believe books should have titles although the trade data and discussion do not deal which are mini-abstracts. Probably the book's most incisive reader appeal with the rapid deterioration of U.S. trade relative to lies in the succinct, persuasive logic used in dispel­ the rest of the world since 1981. ling some common misconceptions about the to­ Garnett Bradford bacco industry. In chapter 2, readers will learn that University of Kentucky U.S. cigarette manufacturers, though few in num­ ber and with sales highly concentrated, do not be­ have as a cartel. There is little, if any, evidence that price exceeds marginal cost to the industry and its Judge, George G., W. E. Griffiths, R. Carter Hill, aggregate of firms. Chapter 3 provides several rea­ The Helmut Liitkepohl, and Tsoung-Chao Lee. sons why tobacco is different from other agricul­ Theory and Practice of Econometrics, 2nd ed. tural commodities and thus cannot serve well as a New York: John Wiley & Sons, 1985, xxix + microcosm for studying other basic farm industries. 1,019 pp., $46.95. Also in chapter 3, readers will find convincing evi­ The second edition of this excellent book is similar dence that the tobacco supply control program, in most respects to the first edition, though it has notwithstanding its other problems, has largely re­ been updated and some topics have been added. moved price uncertainty for tobacco growers. Most of the comments which I made in my review Those who believe that in the event of supply pro­ of the first edition (AlAE, Aug. 1981) therefore still gram abolition there surely must be a number of need not be repeated in detail. The book apply and viable on-farm alternatives to tobacco (such as hor­ provides an encyclopedic coverage of virtually ticultural crops) will be enlightened as they read the every topic covered in the standard graduate last section of chapter 5. econometrics courses and texts. As a reference Johnson adeptly models social welfare features of book, it has no serious competitors. As a text, it is the flue-cured supply control program (chap. 3). widely used despite the fact that the scope of its Then, borrowing from his own previous work and a coverage can make it a bit overwhelming for the 1981 North Carolina State Ph.D. thesis, he illus­ student. There are many econometrics texts with trates that excess revenues collected from foreign less encyclopedic coverage, but clearer exposition tobacco buyers ("monopoly rents") can more than of basic topics, than this book provides. This book exceed the combined losses in consumer and pro­ is not really an adequate substitute for such a text, ducer surplus and the loss in productive efficiency but it is an exceptionally good supplement to it. due to the program. This is interesting, especially in The second edition is 200 pages longer than the view of the fact that the tobacco program leads to first. It discusses some topics which were formerly somewhat higher cigarette prices and is thus en­ omitted or treated perfunctorily in the first edition: tirely consistent with government health programs notably, simultaneous equations, Bayesian analy­ designed to discourage smoking. sis, time series, and asymptotic distribution theory. Unfortunately, the chapter 3 model was not used Except for its price, the second edition is clearly an to its full potential. With only moderate expansion improvement on the first. I am looking forward to of figure 3.1 and the accompanying discussion, a the third edition in 1990. framework for a more complete understanding of Peter J. Schmidt the combined features of poundage quotas, price Michigan State University supports, and cooperative loan stocks could have been delineated. This could have set up a detailed framework for discussing the remainder of this key Luenberger, David G. Linear and Nonlinear Pro­ chapter, for much of chapter 4 on declines in de­ mand, for parts of chapter 5 on structural changes gramming, 2nd ed. Reading MA: Addison-Wes­ and for some of chapter 7 on ley Publishing Co., 1984, xviii + 491 pp., $32.95. in tobacco farming, This important textbook contains a rigorous and cigarette excise tax effects on demand. compact treatment of mathematical program­ The author is a recognized scholar in interna­ ming-not all of it, but a good part. It is not a tional trade economics, particularly on specific ap­ plications to U. S. farm products. Accordingly, the textbook for beginners. It requires a fundamental sections devoted to trade (especially chap. 6) knowledge of matrix and Lagrangean theories be­ should prove valuable to economists and others yond the background (as I know it) of first-year who use this book as a reference or as a text. The Ph.D graduate students of agricultural economics. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Journal of Agricultural Economics Wiley

Judge, George G., W. E. Griffiths, R. Carter Hill, Helmut Lütkepohl, and Tsoung‐Chao Lee. The Theory and Practice of Econometrics, 2nd ed. New York: John Wiley … Sons, 1985, xxix + 1,019 pp., $@@‐@@46.95

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Publisher
Wiley
Copyright
© Agricultural and Applied Economics Association
ISSN
0002-9092
eISSN
1467-8276
DOI
10.2307/1240726
Publisher site
See Article on Publisher Site

Abstract

454 May 1985 Amer. J. Agr. Econ. ing in many countries around the world. Johnson trade model seems a bit disjointed from other parts the preface and contends it is of the chapter. However, the section on product acknowledges this in differentials is excellent. It helps explain how and oflittle consequence since the book's objective is to focus on the workings and effects of U.S. govern­ why U.S. flue-cured and burley farmers were suc­ cessful, for many years, in exporting large quan­ ment farm policy regarding tobacco. A narrower, tities of their tobacco while simultaneously enjoy­ more descriptive title (e.g., "Economics of U.S. ing the benefits of only nominal quantities of im­ Flue-Cured Tobacco Production and Marketing in an Era of Government Price Supports") would ports. Specific insights are advanced as to why im­ ports have increased so rapidly in recent years, please purists who believe books should have titles although the trade data and discussion do not deal which are mini-abstracts. Probably the book's most incisive reader appeal with the rapid deterioration of U.S. trade relative to lies in the succinct, persuasive logic used in dispel­ the rest of the world since 1981. ling some common misconceptions about the to­ Garnett Bradford bacco industry. In chapter 2, readers will learn that University of Kentucky U.S. cigarette manufacturers, though few in num­ ber and with sales highly concentrated, do not be­ have as a cartel. There is little, if any, evidence that price exceeds marginal cost to the industry and its Judge, George G., W. E. Griffiths, R. Carter Hill, aggregate of firms. Chapter 3 provides several rea­ The Helmut Liitkepohl, and Tsoung-Chao Lee. sons why tobacco is different from other agricul­ Theory and Practice of Econometrics, 2nd ed. tural commodities and thus cannot serve well as a New York: John Wiley & Sons, 1985, xxix + microcosm for studying other basic farm industries. 1,019 pp., $46.95. Also in chapter 3, readers will find convincing evi­ The second edition of this excellent book is similar dence that the tobacco supply control program, in most respects to the first edition, though it has notwithstanding its other problems, has largely re­ been updated and some topics have been added. moved price uncertainty for tobacco growers. Most of the comments which I made in my review Those who believe that in the event of supply pro­ of the first edition (AlAE, Aug. 1981) therefore still gram abolition there surely must be a number of need not be repeated in detail. The book apply and viable on-farm alternatives to tobacco (such as hor­ provides an encyclopedic coverage of virtually ticultural crops) will be enlightened as they read the every topic covered in the standard graduate last section of chapter 5. econometrics courses and texts. As a reference Johnson adeptly models social welfare features of book, it has no serious competitors. As a text, it is the flue-cured supply control program (chap. 3). widely used despite the fact that the scope of its Then, borrowing from his own previous work and a coverage can make it a bit overwhelming for the 1981 North Carolina State Ph.D. thesis, he illus­ student. There are many econometrics texts with trates that excess revenues collected from foreign less encyclopedic coverage, but clearer exposition tobacco buyers ("monopoly rents") can more than of basic topics, than this book provides. This book exceed the combined losses in consumer and pro­ is not really an adequate substitute for such a text, ducer surplus and the loss in productive efficiency but it is an exceptionally good supplement to it. due to the program. This is interesting, especially in The second edition is 200 pages longer than the view of the fact that the tobacco program leads to first. It discusses some topics which were formerly somewhat higher cigarette prices and is thus en­ omitted or treated perfunctorily in the first edition: tirely consistent with government health programs notably, simultaneous equations, Bayesian analy­ designed to discourage smoking. sis, time series, and asymptotic distribution theory. Unfortunately, the chapter 3 model was not used Except for its price, the second edition is clearly an to its full potential. With only moderate expansion improvement on the first. I am looking forward to of figure 3.1 and the accompanying discussion, a the third edition in 1990. framework for a more complete understanding of Peter J. Schmidt the combined features of poundage quotas, price Michigan State University supports, and cooperative loan stocks could have been delineated. This could have set up a detailed framework for discussing the remainder of this key Luenberger, David G. Linear and Nonlinear Pro­ chapter, for much of chapter 4 on declines in de­ mand, for parts of chapter 5 on structural changes gramming, 2nd ed. Reading MA: Addison-Wes­ and for some of chapter 7 on ley Publishing Co., 1984, xviii + 491 pp., $32.95. in tobacco farming, This important textbook contains a rigorous and cigarette excise tax effects on demand. compact treatment of mathematical program­ The author is a recognized scholar in interna­ ming-not all of it, but a good part. It is not a tional trade economics, particularly on specific ap­ plications to U. S. farm products. Accordingly, the textbook for beginners. It requires a fundamental sections devoted to trade (especially chap. 6) knowledge of matrix and Lagrangean theories be­ should prove valuable to economists and others yond the background (as I know it) of first-year who use this book as a reference or as a text. The Ph.D graduate students of agricultural economics.

Journal

American Journal of Agricultural EconomicsWiley

Published: May 1, 1985

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