On the Number and Heterogeneity of Bidders in Livestock Auctions

We show in the context of livestock auctions that a seller's revenue may increase or decrease as the number of buyers increases, whether the additional bidder wins or not an object. Additional bidders who fill part of their demand from an outside source may have an even more adverse effect on prices. We use data from the Quebec daily hog auction to measure the effect of new bidders on auction prices. Variations in the number of bidders come from the entry and exit of Quebec packers and sporadic invitations extended to Ontario packers. We find that entry by Quebec packers had a significant positive impact on hog auction prices but that sporadic participation by Ontario packers did not have a significant impact on hog prices.     

活立木交易的最优拍卖竞价研究——基于买方估价和两人竞购的视角

首先阐述了活立木现行交易的基本方式和在交易中活立木定价失真的缺陷,其次通过分析拍卖的优势提出活立木交易中拍卖定价方式。接着介绍了活立木交易中的主体,同时分析了竞买人双方在不同博弈策略和估价策略下的收益。在此基础上建立两人竞购的最优拍卖机制,以简单的概率分析描述竞买人的决策,以买方估价和最大化卖方的期望收益为前提,确定交易价格,得出最优拍卖竞价使得买方总期望收益的增长、使交易公开透明、物品配置合理等优势。     

Agricultural Producer Price Expectations

Producer price expectations underlie much of agricultural supply analysis. While producer price expectations would ideally be discovered experimentally, this is too costly. Instead, producer price expectations are usually represented in agricultural supply analysis by easily obtained hypothesized expectation formulations. In most cases, the hypothesized expectation formulations are functions of past prices. However, other formulations are sometimes used, such as current cash and futures prices, or initial payments in the case of grains marketed by the Canadian Wheat Board. This paper compares actual producer price expectations with a variety of hypothesized expectation formulations for wheat and canola in Saskatchewan. A test developed by Granger is used to determine the proxy models that are significantly dominant. The model that dominates as a proxy in the case of wheat price expectations is the two-year declining-weight moving average. The two models that dominate as a proxy in the case of canola price expectations are the first-order autoregressive and, as well, the two-year declining-weight moving average. There is no significant difference between the two models. Somewhat surprising is the performance of formulations based on futures prices. These formulations perform very poorly in representing producers' price expectations, even though they are found to be among the most accurate predictors of actual commodity prices. An even more interesting observation is the performance of the futures price model in the canola market. Even though the November contract in January explains very little of the variation in the actual commodity prices for that year, its error in predicting canola prices is not significantly greater than that of the best performing, the four-year declining-weight moving average, based upon the root mean squared error criterion.     

The role of task complexity in valuation errors analysis in a developing real estate market

The real estate valuation literature on sub-Saharan Africa (SSA) shows a growing concern over valuation errors, especially wide variation in valuations. Although there have been increased business and investment activities in the last decade or more in the region, these valuation errors pose a challenge to the maturity of SSA real estate markets as valuations promote transparency and support efficient operation of property markets. Based on archival and survey data, as well as insights from the task complexity discourse, this study examines the extent of variations in valuations and the effect of complex valuation tasks on the levels of the variations in Ghana. The study finds high levels of variations in valuation opinions of 33.6–63% for the archival and survey data, respectively. These levels of variations are substantially higher than have been reported in the literature for advanced markets suggesting that the concerns of valuation errors in SSA may be well grounded. Consistent with theory, it is further established that variations in valuation opinions may be more pronounced in comparatively more complex assignments. These findings have several implications including possible loss of confidence of market players in valuations, heightening of market uncertainty and increase in transaction costs.     

A generalized method for valuing agricultural farms under uncertainty

The opacity of the farm market means that valuations are based primarily on expert estimates rather than on actual transaction prices. The valuation method based on the two cumulative distribution functions (VMTCDF), created by Ballestero (1971), improves the synthetic method based on estimating the market value of an asset by establishing a proportional relation between the asset and one external variable. However, in most cases the expert must consider multiple external variables. This paper proposes a definitive extension to k indexes with a methodology particularly applicable to the field of valuation of non-market goods or markets where little information is available as may be the case with the valuation of agricultural land. The contribution is illustrated with an empirical example.     

Wine market prices and investment under uncertainty: an econometric model for Bordeaux Crus Classés

This paper describes an econometric assessment of wine market prices for 21 of the Crus Classés châteaux in the Bordeaux region of France. The model developed in the analysis attempts to define the relationship between factors that influence wine quality and those that influence wine prices. Characteristics of the models are: (1) climate influences on grape composition (acid and sugar levels), (2) grape composition influences on market prices, (3) subjective quality evaluations (Parker‐points) on market prices, and (4) the effects of age of the wine on market prices. The results indicate that composition levels of Merlot‐dominated wines are more climate sensitive than those from Cabernet Sauvignon‐dominated wines. Overall, warm, dry summers result in high sugar and low acid levels at harvest which in turn lead to higher quality wines. Wine market price sensitivity to Parker‐point ratings indicates that properties with high Cabernet Sauvignon‐dominated wines are highly dependent on the external ratings while Merlot‐dominated wines have a decreased rating sensitivity. Smaller properties tend to gain over proportionally from high ratings indicating great jumps in price from year to year. Additionally, châteaux that have experienced high ratings for past vintages exhibit great sensitivity to point steps in ratings for current vintages. Aging has a positive effect on Bordeaux wine pricing. This is due to the increasing maturity as well as the increasing absolute scarcity. Absolute scarcity of product is expressed by the size of the property, with small properties producing less per vintage and therefore having less in the market. Additionally, Merlot‐dominated wines exhibit more maturing potential and profit more from aging than Cabernet Sauvignon‐dominated wines. Average per château real annual profit ranges from 1 to 10%. High levels of grape ripeness, absolute scarcity, and smaller properties that are dominated by Merlot in their blend lead to the highest profits. Forecasts for a vintage not yet on the market indicates that 1995 is better than 1994 for both Cabernet Sauvignon and Merlot‐dominated wines, but that 1996 and 1997 are not as good as 1995, especially for Merlot‐dominated wines.     

World food prices and poverty in Indonesia

Spikes in international food prices in 2007–2008 worsened poverty incidence in Indonesia, both rural and urban, but only by small amounts. The paper reaches this conclusion using a multisectoral and multihousehold general equilibrium model of the Indonesian economy. The negative effect on poor consumers, operating through their living costs, outweighed the positive effect on poor farmers, operating through their incomes. Indonesia's post‐2004 rice import restrictions shielded its internal rice market from the temporary world price increases, muting the increase in poverty. But it did this only by imposing large and permanent increases in both domestic rice prices and poverty incidence. Poverty incidence increased more among rural than urban people, even though higher agricultural prices mean higher incomes for many of the rural poor. Gains to poor farmers were outweighed by the losses incurred by the large number of rural poor who are net buyers of food, and the fact that food represents a large share of their total budgets, even larger on average than for the urban poor. The main beneficiaries of higher food prices are not the rural poor, but the owners of agricultural land and capital, many of whom are urban based.     

Implications for investors,managers, auditors,valuers and regulators of discrepancies in commercial valuations

Summary

The discrepancy between appraised valuations and market prices is a cause for concern to valuers, investors, bankers, trustees, accountants, auditors, portfolio managers and regulators. Members of each group need to clarify how the potential costs of a discrepancy will effect them. Error metrics, relevant to the risk profile of interested parties, are illustrated as a means of quantifying the exposure to which each is subjected. Dialogue and discussion between interest groups is thought to be the best way of overcoming the apparent anomally.     

杭州市住宅价格空间分异:基于特征价格的两维度分析

研究目的:从特征价格的视角,构建城市住宅价格空间分异的两维度分析框架,并对杭州市住宅市场进行实证研究。研究方法:文献资料法和计量分析法。研究结果:住宅特征对住宅价格影响程度的差异性以及住宅特征空间分布的不均匀性,导致了住宅价格的空间分异。研究结论:基于特征价格模型的分析框架是有效且合理的。     

Does It Pay to Increase Competition in Combinatorial Conservation Auctions?

Conservation auctions allow landholders to propose conservation projects and associated payments (bids) for consideration by a conservation agency. Recently, the application of iterative combinatorial auction designs has been proposed to improve outcomes of conservation auctions. In combinatorial auctions, landholders are allowed to offer projects each of which involves activities aimed at providing one or multiple services. An iterative format allows bidders the opportunity to gradually explore the type of projects they want to offer, with this process being facilitated through price feedback provided based on intermediate auction round results. Auction designs vary with the type of feedback and respond differently to market conditions. At present there is a lack of information about their performance in markets with varying degrees of competition (in terms of number of bidders and level of target). Therefore, using an agent‐based simulation model, we evaluate a number of iterative auction designs. We observe that a higher degree of competition leads to a higher auction efficiency. In a high competition environment, efficiency outcomes tend to be less sensitive to auction design choices. Therefore, an auctioneer could enjoy freedom in design choice if adequate competition could be ensured. In weak competition environments, however, some auction designs perform better than others.     

全球农产品价格波动中金融化因素探析

近年来金融化因素在农产品市场中不断深化并形成新的特点，大量流向农产品市场的资金通过衍生市场进行非传统投机，尤其是将指数基金作为主要手段。供求状况难以反映农产品价格波动，而期货价格与指数基金的投机大大推动了农产品价格波动。我国应针对农产品金融化特性做出相应的政策调整。     

Price relationships between qualitatively differentiated agricultural products: organic and conventional wheat in Germany

Organic agriculture, which produces commodities that can be qualitatively differentiated from conventional food products, has grown into an important market in many countries. The dynamics of commodity prices in both sectors are partly interdependent, but are also shaped by independent determinants and have rarely been studied. We analyze organic food markets and their interdependencies with conventional markets in the context of wheat markets in Germany, which have been subject to a number of fundamental changes during the last two decades. Based on institutional market characteristics, we suggest a flexible Markov‐switching asymmetric time series model. We find a pronounced temporal sequence of market phases that differ in their asymmetric dynamics and the extent to which the organic price is influenced by the conventional price. Organic wheat prices tend to be increasingly connected to prices of conventional wheat.     

The effects of the Food Reserve Agency on maize market prices in Zambia

Over the last decade, governments throughout eastern and southern Africa have increasingly used strategic reserves and/or marketing boards to influence grain market outcomes, yet little is known about how these activities are affecting grain markets. This article estimates the effects of the Food Reserve Agency (FRA) on maize market prices in production and consumption regions in Zambia using a vector autoregression model and monthly data from July 1996 through December 2008. In recent years, FRA has become the dominant buyer of smallholder maize in Zambia. Simulations show that FRA activities stabilized market prices throughout the July 1996–December 2008 study period and raised mean prices between July 2003 and December 2008 by 17–19%. The price raising effects of FRA policies have assisted surplus maize producers but adversely affected net buyers of maize in Zambia, namely urban consumers and the majority of the rural poor. The increase in maize price stability is unlikely to have had substantial welfare effects on poor households. In contrast, relatively wealthy producers are likely to have benefited from the higher average and more stable maize prices resulting from FRA policies.     

The implied internal rate of return in conventional residual valuations of development sites

Explicit discounted cash flow methods are used in many countries to assess the value of real estate investments or their likely rate of return given a particular price. These are typically supplemented by simpler models for the purpose of estimating market value, leading to debate about different approaches. A parallel situation exists in the case of UK development sites: both cash flow appraisals and simpler residual valuations are used to assess site values. Yet debate here has been limited, even though traditional residual valuations involve steps that depart from project appraisal practices used in mainstream capital budgeting. We explore the relationship between the profit and interest allowances used in traditional residual valuations and the internal rates of return that they appear to imply. Published residual valuations typically allow for profit through use of a simple proportionate relationship between required profit and the cost or final value of a scheme. They also show limited variation in their profit assumptions, but this implies large differences in expected IRRs. Simulated examples then illustrate the implications of applying standard profit-on-cost rates to schemes of different lengths and with different levels of land value. Findings for project duration, in particular, are noteworthy since they indicate that lower IRRs are implied for longer projects, though this relationship is not necessarily rational.     

Posted Prices and Bid Affiliation: Evidence from Experimental Auctions

In most experimental auctions, researchers ask participants to bid on the same item in multiple potentially binding rounds, posting the price submitted by the top bidder or bidders after each of those rounds. If bids submitted in later rounds are affiliated with posted prices from earlier rounds, this practice could result in biased value estimates. In this article, we discuss the results of an experiment designed explicitly to test whether posted prices affect bidding behavior. We find that for familiar items, high posted prices lead to increased bids in subsequent rounds. Our results have implications for researchers conducting experimental auctions.     

A time series analysis of Danish markets for pork, chicken, and beef

We offer a first-time empirical depiction of Danish dynamic meat price/quantity transmissions by formulating, estimating, and testing a VAR model of market-clearing quantities and prices of the Danish pork, chicken, and beef markets. The analysis illuminates how these markets dynamically handle shocks, and it is demonstrated that: (i) the three meats are close substitutes; (ii) chicken and pork market shocks have own-market and cross-market effects that occur rapidly and swiftly, while beef market shocks have more enduring impacts on pork and chicken markets; (iii) prices are in general more endogenous than quantities; and (iv) the price of chicken is much more endogenous than the prices of pork and beef.     

How much of commodity price behavior can a rational expectations storage model explain?

A rational expectations competitive storage model was applied to the U.S. corn market, to assess the aptness of this framework in explaining monthly price behavior in an actual commodity market. Relative to previous models, extensive realism was added to the model, in terms of how production activities and storage costs are specified. By modeling convenience yield, “backwardation” in prices between crop years did not depend on the unrealistic assumption of zero ending stocks. Our model generated cash prices that were distributed with positive skewness and kurtosis, and mean and variance that increased over the storage season, comparable to the persistence and the occasional spikes observed in commodity prices. Futures prices were generated as conditional expectations of cash prices at contract maturity, and the variances of futures prices exhibited realistic time–to‐maturity and seasonal patterns. Model realizations of cash and futures prices over many “years” were used to demonstrate the wide variety of price behaviors that could be observed in an efficient market with a similar market structure, implying that economic and policy implications drawn from short, historical samples of prices could be misleading.     

Intra-annual sheep price patterns and factors underlying price variations in the central highlands of Ethiopia

A sheep market survey was undertaken to determine the effects of certain animal and market characteristics on price and the pattern of sheep prices in relation to seasons. Nine key Ethiopian central highlands markets were surveyed for a period of one year in 1989. Each market was surveyed once a week on the main market day. Price, weight, sex, age, colour, condition score, breed type and buyer's purpose were recorded for all completed transactions as well as the numbers offered and sold on each market day. A total of 50062 cases were recorded. Three markets, each representing redistributive, intermediate and terminal markets, as identified by the distribution in buyer's purpose were chosen for further analysis. Considerable weekly price variation was evident in these markets. Prices were also seasonal with higher premiums paid during some religious festivals. Animal characteristics (weight, age, condition, sex, colour) as well as buyer's purpose and seasons were variably important in explaining variation in price among animals within weeks. Variations in the composition of these characteristics from week-to-wcek were among factors underlying changes in weekly mean prices. R² varied from 0.2659 to 0.3583 in the quadratic price per kg model and from 0.7822 to 0.8413 in the quadratic price per head model in the three markets. However, it was found that price per head was predicted equally well overall by estimated price per kg multiplied by actual weights and that because of wide variation in weights, both within and between weeks, price per kg is more useful market information.     

A Hedonic Analysis of Nutrition and Health Claims on Fruit Beverage Products

This paper investigates the effects on prices of nutrition and health claims for foodstuffs, in addition to other attributes, using fruit beverages as a case study. The model estimation is based on revealed purchasing behaviour for fruit beverages in the north‐east of Italy. Applying an hedonic price model, the price of a product is explained as a function of product attributes. The model estimate identifies the implicit retail‐market‐level price of specific attributes such as nutrition and health claims, ceteris paribus. Nutrition and health claims significantly affect retail prices. Our findings suggest that retail price response to nutrition and health claims differs in relation to other product attributes, showing a strong reduction of price variation among flavours when such benefits are claimed on the label.     

THE RELATIONSHIP BETWEEN WORLD PRICE INSTABILITY AND THE PRICES FARMERS RECEIVE IN DEVELOPING COUNTRIES

World prices for agricultural commodities are traditionally unstable, but they were particularly turbulent during the late 1970s and early 1980s. This paper uses available post-War data on individual commodity prices to test whether world price instability is increasing, and to examine its impact on the prices producers receive in developing countries. It is found that the recent turbulence was more a statistical fluke than the beginning of any longer-term increase in market instability. Further, while the variability in world prices has been almost entirely transmitted to developing countries in the dollar value of their export unit values, it has not been fully transmitted to average producer prices. Real exchange rates, domestic marketing arrangements and government intervention have acted to buffer price movements for producers in many developing countries.