Temporal aggregation and estimation of inventory functions

In this paper we extend the analysis of the effects of aggregation on the estimated speed of adjustment in inventory models into two directions. First, we try to find out if Lovell's (1993) conclusions regarding the effects of aggregation on the speed of adjustment hold (a) when real firm data...

Full description

Saved in:
Bibliographic Details
Published inInternational journal of production economics Vol. 45; no. 1; pp. 21 - 27
Main Author Ghali, Moheb
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.08.1996
Elsevier
Elsevier Sequoia S.A
SeriesInternational Journal of Production Economics
Subjects
Effects of aggregation
Estimating techniques
Inventory management
Inventory models
Speed of adjustment
Statistical analysis
Studies
Inventory models
Effects of aggregation
Speed of adjustment
Online AccessGet full text

Cover

More Information
Summary:In this paper we extend the analysis of the effects of aggregation on the estimated speed of adjustment in inventory models into two directions. First, we try to find out if Lovell's (1993) conclusions regarding the effects of aggregation on the speed of adjustment hold (a) when real firm data rather than experimental data are used, (b) when the model is modified or when models other than the flexible accelerator are used. Secondly, we examine whether temporal aggregation also leads to underestimation when disaggregated nonseasonally adjusted data are used. The evidence we provide gives strong support to Mundlak's and Zellner's conjectures (cited in Christiano and Eichenbaum (1987)) that temporal aggregation leads to downward bias in the estimated speed of adjustment.
ISSN:0925-5273
1873-7579
DOI:10.1016/0925-5273(95)00129-8