Government Rail Car Regulation and the Price of Canola

Colin Carter

American Journal of Agricultural Economics, 1996, vol. 78, issue 3, 677-686

Abstract: In this paper I analyze Canadian government regulation of rail transportation as it affects the domestic price of canola in both the street and futures market. The regulation gives rise to an idiosyncrasy: Vancouver canola futures and Vancouver spot prices do not converge, with futures trading at a significant premium to spot prices during the delivery month. As a result, Vancouver futures prices do not reflect international market conditions. I offer an explanation of the futures premium. In addition, I find that there is evidence to support a contention that a change in rail car policy in 1989 improved canola throughput efficiency in Vancouver and may have led to higher street prices. Copyright 1996, Oxford University Press.

Date: 1996
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