Grid Pricing: An Empirical Investigation of Market Signal Clarity

Scott Fausti, Bashir A. Qasmi and Jing Li

No 93253, Economics Staff Papers from South Dakota State University, Department of Economics

Abstract: The ability of the grid marketing system for fed cattle to provide an efficient price transmission mechanism is investigated. Nerlove’s (1958) adaptive expectations approach is adopted to model the relationship between grid premiums (discounts) and the weekly relative supply of carcass quality attributes. Linear regression techniques are used to estimate Nerlove’s supply response function. Granger Causality tests are conducted to investigate the relationship between grid premiums (discounts) and the relative supply of carcass quality attributes. Regression estimates and the Granger Causality tests provide empirical support for the 2005 National Beef Quality Audit call for clearer market signals.

Keywords: Marketing; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 26
Date: 2010-08-18
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Persistent link: https://EconPapers.repec.org/RePEc:ags:sdsusp:93253

DOI: 10.22004/ag.econ.93253

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