Examining Dynamically Changing Cattle Market Linkages with Inventory as Controlled Transitions

Yunhan Li and Wenying Li

No 285878, 2017 Conference, April 24-25, 2017, St. Louis, Missouri from NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management

Abstract: This article reports tests of price cointegration of cattle markets in the U.S. and proposes a simple procedure for incorporating a flexible transition function into the ECON smooth transition autoregressive (ECON-STAR) model to evaluate market dynamics over time. This model allows evaluating varying market integration as an exogeneous economic indicator changes throughout a specified time. Cattle are perishable, bulky and costly to transport. These characteristics make cattle markets easily segmented across regions. The empirical results show that these markets have been highly cointegrated when there exists excess supply. Following a sudden decrease in cattle inventory, the market pattern has become very regionally segmented.

Keywords: Marketing (search for similar items in EconPapers)
Date: 2017-04
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Persistent link: https://EconPapers.repec.org/RePEc:ags:n13417:285878

DOI: 10.22004/ag.econ.285878

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