Storage Under Backwardation: A Direct Test of the Wright-Williams Conjecture

Andrew Coleman

No 292804, Motu Working Papers from Motu Economic and Public Policy Research

Abstract: Commodities are often stored when the spot price exceeds the future price in a central market. Wright and Williams conjectured that inventories are held in locations far from the central market on these occasions. In these locations the spot price is lower than the price for forward delivery because transport costs are temporarily high. This hypothesis has not been directly tested, because prices for forward delivery are not normally available at non-central locations. This paper uses an example where these prices exist to test the hypothesis. The evidence, from the late nineteenth century corn markets in Chicago and New York, strongly supports the conjecture.

Keywords: Institutional; and; Behavioral; Economics (search for similar items in EconPapers)
Pages: 34
Date: 2008-10
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/292804/files/08_13.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:motuwp:292804

DOI: 10.22004/ag.econ.292804

Access Statistics for this paper

More papers in Motu Working Papers from Motu Economic and Public Policy Research Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().