Document Type
Article
Publication Date
8-1-2010
Keywords
grid pricing, national beef quality audit, public livestock price reporting, beef carcass quality
Abstract
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.
Publisher
Department of Economics, South Dakota State University
Series Number
2010-3
Number of Pages
26
Recommended Citation
Fausti, Scott; Qasmi, Bashir; and Li, Jing, "Grid Pricing: An Empirical Investigation of Market Signal Clarity" (2010). Economics Staff Paper Series. 196.
https://openprairie.sdstate.edu/econ_staffpaper/196