identification problem

[gusl]

Can anyone explain the identification problem (very short article) in a non-confusing way?

Is this stuff used in the context of estimating supply separate from demand from time-series data? How can one separate these two if we can only measure one figure, namely sales?

I doubt there are any big conceptual hurdles here, but the presentation is confusing. Why do they use Q for both supply and demand?

Comments

[altamira16.livejournal.com]

That article is quite confusing. I was taking it as meaning that P was supply and Q was demand and that their relationship is not always linear due to other factors. For example, the price of gas has gone up how much in the past four years in the US? How much has the demand varied? If the relationship is not linear, what other factors could be coming into play?

[serapio.livejournal.com]

The two equations describe the two lines in the usual supply & demand X-shaped plot. In a two-dimensional model, you are just talking about prices as a function of quantities. Since the observables are the Q & P at the intersection of those lines, to estimate the $$a$$ and $$b$$ parameters you twiddle the X and Y variables, and collect data from how the system responds. I think. I'm not an economist.