An Economic Analysis of Sturctural Relationships in the U.S. Cotton Sector
Ethridge, Don E.
Roy, Sujit K.
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An econometric model was developed to represent the structural relationships of the U.S. cotton sector. The simultaneous equation model consisted of six endogenous variables including the domestic mill use of the U.S. cotton, domestic cotton inventories, U.S. exports to non-Communist countries, and the world price for U.S. cotton. Elasticities were estimated from the model for the domestic cotton price and the polyester price, and for cotton inventories with respect to the loan rate and the domestic cotton price. Elasticities were also obtained to estimate the effects of world price, exchange rates, and export financing on U.S. cotton exports. These elasticity estimates when compared to earlier estimates indicated important changes in the cotton sector since the the 1960's