Document Type

Article

Publication Date

4-15-2007

Keywords

livestock price reporting, cattle pricing, cattle grid, livestock production

Abstract

Mandatory livestock price reporting was implemented in April 2001. Empirical evidence indicates a significant change in volatility occurred in publicly reported fed cattle grid premiums and discounts after its implementation. Empirical analysis of grid premiums and discounts across the pre-and post-reform periods indicates that increased transparency is compatible with either an increase or a decrease in price volatility in the post-MPR period. Furthermore, it appears that the public price reporting system for weekly grid premiums and discounts failed to provide an adequate level of transparency prior to the implementation of price reporting reforms. Our methodology extends the literature on the use of volatility measures for investigating issues associated with market transparency. This extension can be applied to the development of volatility measures for monitoring the price reporting behavior of firms.

Publisher

Department of Economics, South Dakota State University

Series Number

2007-1

Number of Pages

34

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