ABSTRACT
This chapter presents the basic theory and methods of constructing commodity models. It provides an introduction to the major forms of commodity models. During the 1970s, the development of commodity modeling methodologies has grown slowly relative to the extensive modeling applications that took place. This was also followed by a related study of Adams and Behrman that presented more recent developments in commodity modeling methodologies. For example, econometric process models have been developed to analyze the industry process, and spatial equilibrium models are intended to analyze commodity trade flows. Prices are explained by changes in inventories, although this equation is sometimes inverted to explain inventory demand. It contains energy supply engineering models, an energy demand econometric model, and a linear programming model that integrates over supply and demand to generate a set of equilibrium energy prices.
