IDEAS home Printed from https://ideas.repec.org/a/ecj/econjl/v102y1992i413p831-44.html
   My bibliography  Save this article

The Derived Demand with Hedging Cost Uncertainty in the Futures Markets

Author

Listed:
  • Paroush, Jacob
  • Wolf, Avner

Abstract

This study explores the significance of production technology and other parameters on the employment of inputs and hedging. The paper establishes an explicit relationship between the risk as well as prices parameters and the derived demand, production and hedging. The authors find that the futures price relative to the expected spot price affects the demand for production factors. Additionally, the presence of basis risk determines the impact of prices and risk parameters on the derived demand for inputs. Production technology is instrumental in fixing the size of the change in the demand, given a change in the model's parameters. Copyright 1992 by Royal Economic Society.

Suggested Citation

  • Paroush, Jacob & Wolf, Avner, 1992. "The Derived Demand with Hedging Cost Uncertainty in the Futures Markets," Economic Journal, Royal Economic Society, vol. 102(413), pages 831-844, July.
  • Handle: RePEc:ecj:econjl:v:102:y:1992:i:413:p:831-44
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0013-0133%28199207%29102%3A413%3C831%3ATDDWHC%3E2.0.CO%3B2-Y&origin=bc
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Broll, Udo & Eckwert, Bernhard, 1998. "Export and Hedging Decision with State-Dependent Utility," International Review of Economics & Finance, Elsevier, vol. 7(3), pages 247-253.
    2. Dalal, Ardeshir J. & Alghalith, Moawia, 2009. "Production decisions under joint price and production uncertainty," European Journal of Operational Research, Elsevier, vol. 197(1), pages 84-92, August.
    3. Moawia Alghalith, 2008. "Hedging and production decisions under uncertainty: A survey," Papers 0810.0917, arXiv.org.
    4. Kim, Jae-Gyeong, 1993. "Futures markets in an open economy," ISU General Staff Papers 1993010108000011461, Iowa State University, Department of Economics.
    5. Gagnon, Louis & Lypny, Gregory J. & McCurdy, Thomas H., 1998. "Hedging foreign currency portfolios," Journal of Empirical Finance, Elsevier, vol. 5(3), pages 197-220, September.
    6. Moawia Alghalith, 2005. "Input demand with cost uncertainty," International Economic Journal, Taylor & Francis Journals, vol. 19(1), pages 115-123.
    7. Georges Dionne & Marc Santugini, 2015. "Production Flexibility and Hedging," Risks, MDPI, vol. 3(4), pages 1-10, December.
    8. Dionne, Georges & Santugini, Marc, 2014. "Entry, imperfect competition, and futures market for the input," International Journal of Industrial Organization, Elsevier, vol. 35(C), pages 70-83.
    9. Janet S. Netz, 1995. "An Empirical Test of the Effect of Basis Risk on Cash Market Postitions," Risk and Insurance 9501001, University Library of Munich, Germany.
    10. Alghalith, Moawia, 2006. "A note on hedging cost and basis risks," Economic Modelling, Elsevier, vol. 23(3), pages 534-537, May.
    11. Joost M.E. Pennings & Raymond M. Leuthold, 1999. "Commodity Futures Contract Viability: A Multidisciplinary Approach," Finance 9905002, University Library of Munich, Germany.
    12. Moawia Alghalith & Ricardo Lalloob, 2012. "A General Empirical Model of Hedging," JRFM, MDPI, vol. 5(1), pages 1-19, December.
    13. repec:ebl:ecbull:v:4:y:2005:i:15:p:1-6 is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecj:econjl:v:102:y:1992:i:413:p:831-44. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/resssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.