IDEAS home Printed from https://ideas.repec.org/p/ags/nc8191/285764.html

Commodity Futures Contract Viability: A Multidisciplinary Approach

Author

Listed:
  • Pennings, Joost M. E.
  • Leuthold, Raymond M.

Abstract

We propose a framework in which the decisions and wishes of potential customers are investigated simultaneously with the necessary technical properties that need to be met for trading to take place. Within this framework the relationship between trading volume and hedging effectiveness is examined. Both basis risk and market depth risk are taken into account, and the relationship between farmer's characteristics and the probability of using futures is examined. The relationships are tested on a set of data gathered in a stratified sample of 440 famrers by means of computer-assisted personal interviews and on transaction-specific futures data. Structural equation models and multiple regression models are used to validate the relationships. The hedging effectiveness and the variables that play a role in the farmer's use of futures are related to the tools of the exchange.

Suggested Citation

  • Pennings, Joost M. E. & Leuthold, Raymond M., 1999. "Commodity Futures Contract Viability: A Multidisciplinary Approach," 1981-1999 Conference Archive 285764, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    • Handle: RePEc:ags:nc8191:285764
    DOI: 10.22004/ag.econ.285764
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/285764/files/confp18-99.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.285764?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;

    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:ags:nc8191:285764. 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: AgEcon Search (email available below). General contact details of provider: http://www.farmdoc.illinois.edu/nccc134/ .

    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.