Abstract
This study tests the causal direction between captive supply and cash market price in the U.S. cattle procurement market. Finding the correct causality should provide useful information to the decades-long debate on packers' anti-competitive behavior in the U.S. cattle procurement market. It should also help researchers find better econometric specifications for the cash pricecaptive supply relationship. Two causality tests-the Granger test and the Modified Wald test-were conducted. Overall test results indicate that captive supply causes cash market price, and it favors the price-dependent model.
Original language | English |
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Pages (from-to) | 340-350 |
Number of pages | 11 |
Journal | Agricultural and Resource Economics Review |
Volume | 41 |
Issue number | 3 |
DOIs | |
State | Published - Dec 2012 |
Keywords
- Captive supply
- Cattle procurement market
- Causality
- Modified Wald test
- Unit root