1 T ^. ^.
 ij T-k Uit U jt (61)


where Uj., t = 1, ..., T is the estimated residual sequence correspond-
ing to the ith state. The estimated covariance matrix, f, is formed by
replacing j.. with cij in equation (59). Finally, the FSAE for the
system of catch equation is given by


 S= (X* (- a I)X)-1 X*( a I)C* (62)

where I is an identity matrix with rank T. Furthermore, the estimated
variance-covariance matrix for B is given by

 *' 1 -1
 COV e = (X (~ I)X ) (63)

 The precise statistical properties of p are somewhat difficult to
 ascertain. The primary reason for this relates to the stochastic

 specification of the system of equations. Under the assumption that the
 true stochastic specification is first order autoregression with con-
 temporaneous correlation, the asymptotic covariance matrix for p is
 consistent and asymptotically normal and efficient. Unfortunately, the
 actual stochastic specification of the system constitutes a pretest.

 This seriously clouds the precise statistical properties of the esti-
 mated coefficients.

 Price Equation Specification and Estimation

 The latter part of Chapter II presented a scenario in which pro-
 ducing states faced a variable product price. The price faced by
 producers in any given state was dependent on the outputs of all