Empirical Contributions to Basis Theory: The Case of Citrus Futures

Ronald W. Ward and Frank A. Dasse

American Journal of Agricultural Economics, 1977, vol. 59, issue 1, 71-80

Abstract: A futures basis should reflect the marginal cost of physical product plus a risk premium less a convenience yield. However, unique market characteristics may lead to basis bias not explained by the storage theory. An estimate of the basis model for frozen orange concentrate is used to test the theory of storage and to illustrate anticipatory aspects of the basis not included in storage theory.

Date: 1977
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:59:y:1977:i:1:p:71-80.

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