Integrating econometric analysis with scenario analysis for forecasting in a rapidly changing environment: Case study of the United States dry bean industry.
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文摘
The U.S. agricultural economy is in the midst of rapid and significant structural transformations. These changes have implications for all participants in the agriculture and food industry. The issue of changes assumes importance because of its implications for decision-making. While it is very challenging to plan in a rapidly changing environment; the most pressing issues arise in such circumstances. In the recent agricultural economics literature, there is concern regarding the analytical capacity of the traditional economic models in analyzing these changes and understanding their implications for the future of the industry. The main contention is that in times of rapid changes, a traditional analytical approach based on historical data is not likely to be useful in ex ante assessment of the imminent changes. This study attempts to address these concerns by integrating econometric analysis with scenario analysis, a widely recognized approach in the strategic management literature for planning in a rapidly changing environment. The combined approach is illustrated by conducting an analysis of the U.S. dry bean industry as the industry has faced several changes in the past two decades.;The study involved conducting a scenario analysis and an econometric analysis of the dry bean industry and integrating the two approaches for the future analysis. Scenario analysis helped to identify the key driving forces that have affected the industry and to understand the impact of these changes on the industry participants. From these driving forces, the two key forces likely to influence the industry in different directions were identified as---demand for dry beans and the impact of globalization. An econometric model for the U.S. dry bean industry was outlined to represent economic relationships in the industry. To integrate the two analyses, quantitative estimates of the uncertain factors identified by the scenario analysis were obtained using the Nominal Group Technique. The future scenarios for the dry bean industry were based on model simulation by incorporating the results of the scenario analysis into the econometric model. Three future scenarios outlined for the dry bean industry are: "More of the Same", which presents the baseline situation with no major changes; "Challenged in a Global Market" presents a situation where the U.S. dry bean industry is challenged by intense competition from global producers; and finally, "Saved by Consumer Demand" presents the most positive situation for the industry because of a significant upward shift in demand.;Integrating scenario analysis and econometric analysis helped to evaluate how the key industry variables evolve differently based on the possible outcomes of the key uncertain forces. The main advantage of the integrated approach is that it enables envisioning a range of fundamentally different outcomes for the industry which would not be possible using only the traditional analysis. Envisioning a broad range of outcomes enhances decision making in times of rapid change by making decisions that are likely to be robust across all outcomes.