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Estimating Sources Of Fluctuations In The Australian Wool Market: An Application Of Var Methods

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  • Myers, Robert J.
  • Piggott, Roley R.
  • Tomek, William G.

Abstract

Vector autoregression (VAR) methods are used to analyse the contribution of supply, demand and policy shocks to unpredictable fluctuations in the market for Australian wool. VAR procedures are compared with conventional structural econometric models as methods for decomposing sources of instability. While each has advantages and disadvantages, VAR procedures might be viewed as preferable when the underlying market structure is complex and uncertain, as it is in the case of wool. Based on the results obtained, demand shocks are the dominant source of uncertainty in the wool market in the absence of Australian Wool Corporation intervention, but intervention has blunted their effects, reducing market uncertainty and increasing the average level of prices and revenues.

Suggested Citation

  • Myers, Robert J. & Piggott, Roley R. & Tomek, William G., 1990. "Estimating Sources Of Fluctuations In The Australian Wool Market: An Application Of Var Methods," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 34(3), pages 1-21, December.
    • Handle: RePEc:ags:ajaeau:22357
    DOI: 10.22004/ag.econ.22357
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    1. Phillips, Shauna & Bewley, Ronald A., 1991. "The Effects Of Flexible Exchange Rates On Australian Wool Prices," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 35(01), pages 1-28, April.
    2. Wenshou Yan, 2016. "Political Economy of Trade and Storage Policies Coordination, and the Role of Domestic Public Storage in the World Market," Adelaide Economics Working Papers 2016-16, Adelaide University, School of Economics.
    3. Donovan, Cynthia & Myers, Robert & Tschirley, David & Weber, Michael, 1997. "The Effects of Food Aid on Maize Prices in Mozambique," 1997 Conference, August 10-16, 1997, Sacramento, California 197055, International Association of Agricultural Economists.
    4. F. In & S. N. Onchoke, 1995. "The Sources Of Commodity Export Revenue Variability In The South Pacific Island Nations," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(2), pages 214-226, May.
    5. Jayne, Thomas S. & Meyers, Robert J. & Nyoro, James K., 2005. "Effects of Government Maize Marketing and Trade Policies on Maize Market Prices in Kenya," Food Security Collaborative Working Papers 55162, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    6. STEVEN C. BLANK & COLIN A. CARTER & JEFFREY McDONALD, 1997. "Is The Market Failing Agricultural Producers Who Wish To Manage Risks?," Contemporary Economic Policy, Western Economic Association International, vol. 15(3), pages 103-112, July.
    7. Morales, Luis Emilio & Balie, Jean & Magrini, Emiliano, . "How has the minimum support price policy of India affected cross-commodity price linkages?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 24(2).
    8. Mather, David & Zavale, Hélder & Cunguara, Benedito & Tschirley, David, 2016. "Analysis of Food Commodity Prices in Mozambique before and after the 2007/08 International Food Price Crisis," Miscellaneous Publications 251854, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    9. Zavale, Helder & Myers, Robert & Tschirley, David, 2015. "Market Level Effects of World Food Program Local and Regional Procurement of Food Aid in Africa," 2015 Conference, August 9-14, 2015, Milan, Italy 211862, International Association of Agricultural Economists.
    10. Moir, Brian & Piggott, Roley R., 1991. "Combinations Of Buffer-Stocks And Buffer-Funds For Wool Price Stabilisation In Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 35(01), pages 1-13, April.
    11. Razek, Noha H.A. & Michieka, Nyakundi M., 2019. "OPEC and non-OPEC production, global demand, and the financialization of oil," Research in International Business and Finance, Elsevier, vol. 50(C), pages 201-225.

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