Panel Data Estimation Methods on Supply and Demand Elasticities: The Case of Cotton in Greece

This article examines the effects of the application of panel data estimation methods on a system of equations with unbalanced panel data. We apply pooled, random-effects, and fixed-effects estimation in three data sets: small, medium, and large farms to examine the relationship between farm size and the elasticity of cotton supply with respect to cotton price. Our results indicate that the adoption of various estimation methods entails different estimated parameters both in terms of their absolute value and in terms of their statistical significance. Additionally, the elasticity of cotton supply with respect to price varies according to farm size.