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Agricultural and Resource Economics Commons™
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Full-Text Articles in Agricultural and Resource Economics
Grid Pricing: An Empirical Investigation Of Market Signal Clarity, Scott Fausti, Bashir Qasmi, Jing Li
Grid Pricing: An Empirical Investigation Of Market Signal Clarity, Scott Fausti, Bashir Qasmi, Jing Li
Economics Staff Paper Series
The ability of the grid marketing system for fed cattle to provide an efficient price transmission mechanism is investigated. Nerlove' s (1958) adaptive expectations approach is adopted to model the relationship between grid premiums (discounts) and the weekly relative supply of carcass quality attributes. Linear regression techniques are used to estimate Nerlove's supply response function. Granger Causality tests are conducted to investigate the relationship between grid premiums (discounts) and the relative supply of carcass quality attributes. Regression estimates and the Granger Causality tests provide empirical support for the 2005 National Beef Quality Audit call for clearer market signals.
Insecticide Use And Crop Selection: A South Dakota Case Study, Tia Mcdonald, Ariel Keating, Scott Fausti, Jing Li, Mike Catangui
Insecticide Use And Crop Selection: A South Dakota Case Study, Tia Mcdonald, Ariel Keating, Scott Fausti, Jing Li, Mike Catangui
Economics Staff Paper Series
South Dakota has recently experienced a significant increase in the proportion of acres treated with insecticide. Unfortunately, data on insecticide usage by crop at the county level is not available. The following case study seeks to uncover the reasons for this increase by analyzing county-level data in South Dakota with a fixed effects panel regression. The study links the proportion of acres planted for a specific crop to the proportion of total acres treated with insecticide. This approach provides insight on how changing cropping patterns in South Dakota have influenced insecticide use.
Variance Risk Premiums And Predictive Power Of Alternative Forward Variances In The Corn Market, Zhiguang Wang, Scott Fausti, Bashir Qasmi
Variance Risk Premiums And Predictive Power Of Alternative Forward Variances In The Corn Market, Zhiguang Wang, Scott Fausti, Bashir Qasmi
Economics Staff Paper Series
We propose a fear index for corn using the variance swap rate synthesized from out-of-the-money call and put options as a measure of implied variance. Previous studies estimate implied variance based on Black (1976) model or forecast variance using the GARCH models. Our implied variance approach, based on variance swap rate, is model independent. We compute the daily 60-day variance risk premiums based on the difference between the realized variance and implied variance for the period from 1987 to 2009. We find negative and time-varying variance risk premiums in the corn market. Our results contrast with Egelkraut, Garcia, and Sherrick …