| A model is developed to explain Florida citrus planting levels by variety. The varietal choice is based on the expected prices and price variances/covariances of the varieties under consideration. Overall planting returns are maximized for a given level of price risk. The model's price coefficients are similar to those of the Theil and Barten Rotterdam demand model. As in the Rotterdam model, both absolute and relative price coefficient specifications are considered, allowing an examination of restrictions related to the price risk. The empirical analysis considers two restricted specifications -- a varietal independence model, based on the assumption that only the price variances are important for predicting planting levels, and a group independence... |
