Hostname: page-component-848d4c4894-4rdrl Total loading time: 0 Render date: 2024-07-07T05:57:25.505Z Has data issue: false hasContentIssue false
  • English
  • Français

Effect of Risk Aversion on Feeder Cattle Prices

Published online by Cambridge University Press:  28 April 2015

Jung-Hee Lee  and
B. Wade Brorsen
Jung-Hee Lee
Affiliation:
Department of Agricultural Economics, North Dakota State University, Fargo, North Dakota
B. Wade Brorsen
Affiliation:
Department of Agricultural Economics, Oklahoma State University, Stillwater, Oklahoma
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper determines the effects of cattle feeders' risk aversion on feeder cattle prices using pen data of Kansas feedlots. Higher profit risk results in lower feeder cattle prices. The elasticity of feeder cattle price with respect to profit risk was small (-0.013). The risk elasticity estimated here is similar to risk elasticities in previous studies and thus, the use of pen-level data does not seem to add much to the study of risk.

Keywords

feedlot pen dataprice expectationshedonic priceprice riskrisk aversion
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 26 , Issue 2 , December 1994 , pp. 386 - 392
Copyright
Copyright © Southern Agricultural Economics Association 1994

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Antonovitz, Frances and Green, Richard. “Alternative Estimates of Fed Beef Supply Response to Risk.” Amer. J. Agr. Econ. 72(May 1990):475–87.CrossRefGoogle Scholar
Antonovitz, Frances and Roe, Terry. “A Theoretical and Empirical Approach to the Value of the Information in Risky Markets.” Rev. Econ. Statist. 68(1986): 105–14.CrossRefGoogle Scholar
Bailey, D.V., Brorsen, B. W., and Fawson, C.. “Buyer Concentration at Feeder Cattle Auctions.” Rev. Agr. Econ. 15 (January 1993): 103–119.CrossRefGoogle Scholar
Brorsen B., Wade, Chavas, Jean-Paul, and Grant, Warren R.. “A Market Equilibrium Analysis of the Impact of Risk on the U.S. Rice Industry.” Amer. J. Agr. Econ. 69(November 1987):733–739.CrossRefGoogle Scholar
Brorsen B., Wade, Chavas, Jean-Paul, Grant, Warren R., and Schnake, L. D.. “Marketing Margins and Price Uncertainty: The Case of the U.S. Wheat Market.” Amer. J. Agr. Econ. 67(August 1985):521–28.CrossRefGoogle Scholar
Brorsen B., Wade, Grant, Warren R., and Edward Rister, M.. “A Hedonic Price Model for Rough Rice Bid/Acceptance Markets.” Amer. J. Agr. Econ. 66(May 1984): 156–63.CrossRefGoogle Scholar
Carl, Ella, Kilmer, Richard L., and Kenny, Lawrence W.. “Evaluating Implicit Prices of Intermediate Products.” Amer. J. Agr. Econ. 65(August 1983):592–95.CrossRefGoogle Scholar
Chicago Mercantile Exchange, “Daily Information Bulletin.” various issues.Google Scholar
Economic Report of the President. Washington, D.C.:United States Government Publication Office, 1992.Google Scholar
Ethridge, Don E. and Davis, Bob. “Hedonic Price Estimation for Commodities: An Application to Cotton.” W. J. Agr. Econ. 7(December 1982):293–300.Google Scholar
Ethridge, Don E. and Neeper, Jarral T.. “Producer Returns from Cotton Strength and Uniformity: An Hedonic Price Approach.” S. J. Agr. Econ. 19(July 1987):91–97.Google Scholar
Gardner, Bruce L. “Futures Prices in Supply Analysis.” Amer. J. Agr. Econ. 58(February 1976):81–84.CrossRefGoogle Scholar
Greene, William H.Econometric Analysis. New York: Macmillan, 1993.Google Scholar
Holt, Matthew T. “Risk Response in the Beef Marketing Channel: A Multivariate Generalized ARCH-M Approach.” Amer. J. Agr. Econ. 75(August 1993):559–571.CrossRefGoogle Scholar
Holt, Matthew T. and Aradhyula, Satheesh V.. “Price Risk in Supply Equations: An Application of GARCH Time-Series Models to the U.S. Broiler Market.” S. Econ. J. (March l991):230–42.Google Scholar
Hurt, Christopher and Garcia, Philip. “The Impact of Price Risk on Sow Farrowings, 1967-78.” Amer. J. Agr. Econ. 64(August 1982):565–68.CrossRefGoogle Scholar
Ladd, George W. and Martin, Marvin B.. “Prices and Demands for Input Characteristics.” Amer. J. Agr. Econ. 58(February 1976):21–30.CrossRefGoogle Scholar
Lin, William. “Measuring Aggregate Supply Response under Instability.” Amer. J. Agr. Econ. 59(1977):903–907.CrossRefGoogle Scholar
McAfee R., Preston and McMillan, John. “Auctions and Bidding.” J. Econ. Lit. 25(June 1987):699–738.Google Scholar
Nieuwoudt, W.L., Womack, A. W., and Johnson, S. R.. “Measurement of Importance of Risk on Supply Response of Corn and Soybeans.” N. Cent. J. Agr. Econ. 10(JuIy 1988):281–291.Google Scholar
Pardew, Jolie B., Shane, Ronald L., and Yanagida, John F.. “Structural Hedonic Prices of Land Parcels in Transition from Agriculture in a Western Community.” W. J. Agr. Econ. 11 (July 1986):50–57.Google Scholar
Professional Cattle Consultants Inc., Weatherford, Oklahoma. Private company data on clientele fed cattle transactions.Google Scholar
Shonkwiler, J.S. and Hinckley, Suzanne. “A Generalized Supply Response/Factor Demand Model and Its Application to the Feeder Cattle Market.” W. J. Agr. Econ. 10(December 1985):245–53.Google Scholar
Tronstad, Russell and McNeill, Thomas J.. “Asymmetric Price Risk: An Econometric Analysis of Aggregate Sow Farrowings, 1978-86.” Amer. J. Agr. Econ. 71 (August 1989):630–637.CrossRefGoogle Scholar
Wilson, William W. “Hedonic Prices in the Malting Barley Market.” W. J. Agr. Econ. 9(July 1984):29–40.Google Scholar