Effects of Alternative Marketing Arrangements on the Spot Market Price Distribution in the U.S. Hog Market

We propose a model that elucidates the two channels through which alternative marketing arrangements affect spot price in livestock markets. The direct effect works through their effect on demand and supply. The indirect effect works through spot price volatility, which has been ignored in the literature. We then estimate a dynamic model with data from the U.S. hog market to test our model implications and quantify the two effects. We find increases in the use of AMAs increase spot price volatility and decrease spot price level. The short-run effects are small but the long-run effects are nontrivial.


Issue Date:
2015-05
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/206595
Published in:
Journal of Agricultural and Resource Economics, Volume 40, Number 2
Page range:
242-265
Total Pages:
24




 Record created 2017-04-01, last modified 2017-08-28

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