Grid Pricing: An Empirical Investigation of Market Signal Clarity

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.


Issue Date:
Aug 18 2010
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/93253
Total Pages:
26
JEL Codes:
Q11; D40
Series Statement:
Staff Paper
2010-3




 Record created 2017-04-01, last modified 2017-08-25

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