A macroeconomic (simultaneous equation) model of the Estonian livestock sector.

The primary objective of the present study was creation of a macroeconomic (simultaneous equation) model of Estonian livestock sector. Simultaneous equation modeling provides a new approach to the economic analysis. A macroeconomic model of Estonian livestock sector was created using the approach pioneered by FAPRI. The FAPRI GOLD is a dynamic, partial equilibrium, multi-commodity, global econometric model. This paper outlines the linkage between the livestock sector and input sectors. The stochastic equations are estimated by two stage least squares (2SLS) and three stage least squares (3SLS). The equations were estimated using data from 1992 to 2007 inclusive. Most of the parameters of all structural equations are significant and theoretically consistent. Projections for the main endogenous variables are made for a six-year period. The projections of beef and veal, pig meat and broiler production and domestic use are presented and analyzed. Perspective implementation of Estonian livestock sector model as a decision making instrument for projection and analysis purposes is considered.