Causality Between Captive Supplies and Cash Market Prices in the U.S. Cattle Procurement Market
AbstractThis study tests the causal direction between captive supply and cash market price in the U.S. cattle procurement market. Finding the correct causality should provide useful information to the decades-long debate on packersâ€™ anti-competitive behavior in the U.S. cattle procurement market. It should also help researchers find better econometric specifications for the cash price-captive supply relationship. Two causality testsâ€”-the Granger test and the Modified Wald testâ€”-were conducted. Overall test results indicate that captive supply causes cash market price, and it favors the price-dependent model.
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Bibliographic InfoArticle provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.
Volume (Year): 41 (2012)
Issue (Month): 3 (December)
captive supply; cattle procurement market; causality; Modified Wald test; unit root; Agribusiness; Livestock Production/Industries; Marketing;
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