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Stability of price premiums for wool

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  • Chang, Hui-Shung (Christie)

Abstract

The objective of this study was to determine whether long-run relationships existed between price premiums for wools with different fibre diameters. Based on cointegration analysis using monthly data from 1976.8 to 1999.10, the results showed that price premiums, in relative price terms, for fibre diameters between 19 and 23 micron were cointegrated. Furthermore, the price premiums for 19, 20 and 21 micron were found to be weakly exogenous. The latter result suggested that price premiums for finer wools tended to be more stable, compared with coarser wools which appeared to bear the burden of price adjustments. The implication is that wool producers would enjoy more stable prices, and hence income, by focusing on finer wools.

Suggested Citation

  • Chang, Hui-Shung (Christie), 2000. "Stability of price premiums for wool," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123621, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare00:123621
    DOI: 10.22004/ag.econ.123621
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    References listed on IDEAS

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    1. Bardsley, Peter, 1994. "The Collapse of the Australian Wool Reserve Price Scheme," Economic Journal, Royal Economic Society, vol. 104(426), pages 1087-1105, September.
    2. Stephen Beare & Helen Meshios, 1990. "Substitution Between Wools Of Different Fibre Diameter," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 34(1), pages 56-66, April.
    3. Myers, Robert J., 1994. "Time Series Econometrics and Commodity Price Analysis: A Review," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 62(02), pages 1-15, August.
    4. Beare, Stephen & Meshios, Helen, 1990. "Substitution Between Wools Of Different Fibre Diameter," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 34(01), pages 1-11, April.
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