Causality between captive supplies and cash market prices in the U.S. cattle procurement market

In Bae Ji, Chanjin Chung

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

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 languageEnglish
Pages (from-to)340-350
Number of pages11
JournalAgricultural and Resource Economics Review
Volume41
Issue number3
DOIs
StatePublished - Dec 2012

Keywords

  • Captive supply
  • Cattle procurement market
  • Causality
  • Modified Wald test
  • Unit root

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