393 research outputs found

    PRICE ASYMMETRY IN SPATIAL FED CATTLE MARKETS

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    Price asymmetry in spatial fed cattle markets is investigated for three large markets (Texas Panhandle, Nebraska, and Colorado) and one small market (Utah). Little support is found for the notion that equilibrium prices for fed cattle are asymmetric between locations. However, adjustments to price increases and price decreases occur at different speeds.Demand and Price Analysis, Livestock Production/Industries,

    DYNAMICS OF REGIONAL FED CATTLE PRICES

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    The dynamic relationship between four regional cash prices for fed (slaughter) cattle is investigated using time series analysis and causality tests. The results indicate that price adjustments to new information take about one week. Texas Panhandle price also was determined to dominate the price discovery process. Regional prices also were found to be interdependent. This suggests that increasing regional meat packer concentration may not grant meat packers increased regional market power in their pricing practices.Demand and Price Analysis, Livestock Production/Industries,

    INCREASING THE ACCURACY OF OPTION PRICING BY USING IMPLIED PARAMETERS RELATED TO HIGHER MOMENTS

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    The inaccuracy of the Black-Scholes formula arises from two aspects: the formula is for European options while most real option contracts are American; the formula is based on the assumption that underlying asset prices follow a lognormal distribution while in the real world asset prices cannot be described well by a lognormal distribution. We develop an American option pricing model that allows non-normality. The theoretical basis of the model is Gaussian quadrature and dynamic programming. The usual binomial and trinomial models are special cases. We use the Jarrow-Rudd formula and the relaxed binomial and trinomial tree models to imply the parameters related to the higher moments. The results demonstrate that using implied parameters related to the higher moments is more accurate than the restricted binomial and trinomial models that are commonly used.option pricing, volatility smile, Edgeworth series, Gaussian Quadrature, relaxed binomial and trinomial tree models, Marketing, Risk and Uncertainty,

    GLOBAL OPTIMIZATION METHODS

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    Training a neural network is a difficult optimization problem because of numerous local minimums. Many global search algorithms have been used to train neural networks. However, local search algorithms are more efficient with computational resources, and therefore numerous random restarts with a local algorithm may be more effective than a global algorithm. This study uses Monte-Carlo simulations to determine the relative efficiency of a local search algorithm to 9 stochastic global algorithms. The computational requirements of the global algorithms are several times higher than the local algorithm and there is little gain in using the global algorithms to train neural networks.Research Methods/ Statistical Methods,

    HEDGING CARCASS BEEF TO REDUCE THE SHORT-TERM PRICE RISK OF MEAT PACKERS

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    Hedging in the live cattle futures market has largely been viewed as a method of reducing producer's price over a rather lengthy production period (three to six months). Meat packers and processors also face price risk. However, packers' and processors' price risk lies on the upside (i.e., risk is due to price increases) and is also relatively short-term (usually a few days). The possibility of reducing packers' and processors' price risk through long-hedging on the live cattle contract for a short period of time (one week) was investigated. The results suggest some potential benefits to meat packers form following a routine hedging strategy.Livestock Production/Industries, Marketing,

    AGRICULTURAL ECONOMICS RESEARCH AND EXTENSION MARKETING PROGRAMS: HOW WELL ARE THEY INTEGRATED?

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    Extension marketing economists were surveyed to determine whether they are using available research results and whether research is being conducted on topics relevant to extension marketing economists. In some cases, the beliefs of extension marketing economists differ from recent research results. The research topics recommended by extension economists and the topics of papers presented at the 1994-97 annual NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management are well matched. While relevant research is being done, many extension economists desire marketing strategies that both reduce risk and increase income. Research, however, has not produced such strategies.efficient markets, extension, farmer marketing, outlook, research, risk, Teaching/Communication/Extension/Profession,

    RESOLVING THE CONFLICTS BETWEEN PREVIOUS MEAT GENERIC ADVERTISING STUDIES

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    Past research disagrees about the effectiveness of generic meat advertising. The conflicting findings are shown to be due to the data transformation used by Ward and Lambert. The results support Brester and Schroeder's findings that the effect of generic meat advertising is small.Livestock Production/Industries, Marketing,

    Implications of Behavioral Finance for Farmer Marketing Strategy Recommendation

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    Behavioral finance is a relatively new field of inquiry that may help better understand farmer marketing. The theory argues that people tend to make certain psychological biases that cause them to not be fully rational in an economic sense. For example, people tend to be about twice as upset about a loss as they would be happy about a gain of the same size. The theory can help explain why producers would pay a marketing consultant even when markets are efficient. Extension programs need to consider the psychology of marketing. The theory suggests that decisions need to be framed in terms of their effect on the whole farm operation and in terms of profits over a series of years.Agricultural Finance, Marketing,
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