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Mandatory Versus Voluntary Price Reporting: An Empirical Investigation Of The Market Transparency Controversy

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  • Fausti, Scott W.
  • Keimig, R.
  • Diersen, Matthew A.
  • Kim, Han
  • Santos, Joseph M.

Abstract

The ability of the former voluntary price reporting system to generate market transparency in U.S. livestock markets was called into question by producer groups and academic research prior to the new federal system of mandatory price reporting being implemented. The market transparency issue is investigated by comparing price data collected from the former AMS voluntary price reporting system to mandatory price reporting data for live slaughter steers collected by the State of South Dakota before the advent of the new federal system. The relationship between a set of public price report series and the South Dakota mandatory price series is analyzed using cointegration techniques. The empirical findings indicate a strong long-run and short-run integrated relationship between the mandatory price series and a majority of the selected public price reports. We conclude that in the cash market for live steers in South Dakota, the former voluntary price reporting system did foster market transparency and aided in the price discovery process.

Suggested Citation

  • Fausti, Scott W. & Keimig, R. & Diersen, Matthew A. & Kim, Han & Santos, Joseph M., 2003. "Mandatory Versus Voluntary Price Reporting: An Empirical Investigation Of The Market Transparency Controversy," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35139, Southern Agricultural Economics Association.
  • Handle: RePEc:ags:saeatm:35139
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    File URL: http://purl.umn.edu/35139
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    1. Granger, C. W. J., 1981. "Some properties of time series data and their use in econometric model specification," Journal of Econometrics, Elsevier, vol. 16(1), pages 121-130, May.
    2. Lawrence, John D. & Shafer, John & Hayenga, Marvin L., 1996. "Valuing Public Price Reporting: The Iowa Experience," Staff General Research Papers Archive 5148, Iowa State University, Department of Economics.
    3. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    4. Savin, N Eugene & White, Kenneth J, 1978. "Testing for Autocorrelation with Missing Observations," Econometrica, Econometric Society, vol. 46(1), pages 59-67, January.
    5. Bastian, Christopher T. & Koontz, Stephen R. & Menkhaus, Dale J., 2001. "Will Mandatory Price Reporting Improve Pricing And Production Efficiency In An Experimental Market For Fed Cattle?," 2001 Conference, April 23-24, 2001, St. Louis, Missouri 18969, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    6. Lawrence, John D. & Shaffer, John A. & Hayenga, Marvin L., 1996. "Valuing Public Price Reporting: The Iowa Experience," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 14(1).
    7. Anderson, John D. & Ward, Clement E. & Koontz, Stephen R. & Peel, Derrell S. & Trapp, James N., 1998. "Experimental Simulation Of Public Information Impacts On Price Discovery And Marketing Efficiency In The Fed Cattle Market," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(01), July.
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    Cited by:

    1. repec:oup:revage:v:26:y:2004:i:4:p:521-538. is not listed on IDEAS
    2. Sarah Grunewald & Ted C. Schroeder & Clement E. Ward, 2004. "Cattle Feeder Perceptions of Livestock Mandatory Price Reporting," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(4), pages 521-538.

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    Marketing;

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