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Investigating the Divergence in Wheat Prices

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  • Arnade, Carlos Anthony
  • Vocke, Gary

Abstract

This study investigates whether importers of U.S. wheat form an integrated market or a series of segmented markets. Two market integration tests are applied: one based on equilibrium price relationships and one based on disequilibrium price relationships. With the exception of a few importers, both tests tend to agree. This study also seeks to explain the reasons for the wide divergence in prices paid by importers of U.S. wheat. We find that factors such as the class of wheat which is purchased and the size of annual purchases influence pricing. We also find that there continues to be large persistence difference in the prices paid by importers.

Suggested Citation

  • Arnade, Carlos Anthony & Vocke, Gary, 2013. "Investigating the Divergence in Wheat Prices," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150491, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea13:150491
    DOI: 10.22004/ag.econ.150491
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    References listed on IDEAS

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    1. Carlos Arnade & Daniel Pick, 1999. "Alternative approach to measuring oligopoly power: a wheat market example," Applied Economics Letters, Taylor & Francis Journals, vol. 6(3), pages 195-197.
    2. Paul R. Johnson & Thomas Grennes & Marie Thursby, 1979. "Trade Models with Differentiated Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(1), pages 120-127.
    3. Carlos Arnade & Stefan Osborne, 2004. "Measurement and Testing for Equality of Foreign Price and Consumer Price Index Transmission in Russia," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 52(1), pages 107-125, March.
    4. Haley, Stephen L., 1995. "Product Differentiation in Wheat Trade Modeling," Technical Bulletins 156766, United States Department of Agriculture, Economic Research Service.
    5. Arnade, Carlos Anthony & Osborne, Stefan, 2001. "Measurement And Testing For Neutrality Of Foreign Price And Cpi Transmission In Russia," 2001 Annual meeting, August 5-8, Chicago, IL 20625, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    Cited by:

    1. Gutierrez, Luciano & Piras, Francesco, 2014. "A global VAR model for the analysis of wheat export prices," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182723, European Association of Agricultural Economists.

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