Research Bulletin (Iowa Agriculture and Home Economics Experiment Station)


The objective of this study was to measure determinants of short-term inventory behavior for selected commodities: beef, pork, butter, cheese, department store stocks, manufacturers' nondurable inventories and manufacturers' durable inventories. The last two were studied using monthly data; the others, with quarterly data.

Dynamic considerations must enter into any adequate explanation of inventories. Distributed lag models were used in this study because they are one reasonable way of treating such dynamic phenomenon as expectations, frictions and lags. Such models are useful for study of inventory behavior. Nevertheless, there are some problems in using them. They commonly lead to equations to be estimated which are nonlinear in the parameters. Reduced equations containing exactly the same variables but different nonlinear combinations of parameters may be obtained from different models containing different behavioral assumptions. Whenever linear estimation is used, as in this study, we must be cautious about placing specific behavioral interpretations on the resulting coefficients.



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.