Pricing‐To‐Market Analysis: The Case of EU Wheat Exports

The EU is a major player in the global wheat market. This paper examines the pricing behaviour of EU wheat exporters using a pricing‐to‐market (PTM) analysis. Wheat is an exemplary product for testing PTM theories as it is widely and frequently traded, and largely unbranded. We estimate the relationship between export unit values and exchange rates using quarterly panel data for 11 EU export destinations for 2000–2013. Results show that there is a meaningful long‐run relationship between export unit values and exchange rates, but there is little evidence of differential mark‐ups between EU export markets. Belarus and Iceland are exceptions where exporters from the EU appear to exercise local currency price stabilisation.     

Canadian Cattle Cycles and Market Shocks

We analyze Canadian beef cattle cycles using time‐series properties of four variables: total cattle inventories, beef cow inventories, beef supply, and beef prices. Our aim is to provide up‐to‐date estimates of the duration of the cycles, and to determine whether or not some of the recent market shocks can be associated with changes in the nature of the cycles. Spectral decomposition of the variables reveals 10‐year cycles in total cattle inventories, beef cow inventories, beef supply, and beef prices. Seasonal and annual cycles are also found in beef supply and prices, respectively. Using intervention analysis, exchange rate appreciation, feed price escalation, and bovine spongiform encephalopathy (BSE) are modeled as pure jumps. Exchange rate and feed price shocks are modeled as having started in 2002 and 2007, respectively, and persisted up to the end of the sample period, while BSE is modeled as a shift for the period 2003 to 2005. We find significant impacts of the three shocks on total inventories, but beef supply appears to have been impacted by exchange rates and BSE. A spectral comparison of the pre‐ and post‐shock periodograms of beef supply reveals a 58% reduction in the peak amplitude of the beef supply cycle.     

Estimating Market Power by Retailers in a Dynamic Framework: the Italian PDO Cheese Market

In this article, we evaluate the role of market power by retailers within the supply chain of Parmigiano Reggiano (PR) and Grana Padano (GP), the two most famous Italian quality cheeses. Market power is analysed in the context of a dynamic imperfect competition model of the supply chain, in which retailers are allowed to exert market power both downstream and upstream. We jointly estimate market‐power parameters together with supply and demand elasticities, by means of a structural system of demand, supply and price‐transmission equations, estimated using the generalised method of moments. We find evidence of downstream market power by retailers (toward final consumers) for PR and GP, but no evidence of upstream market power (toward processors/ripeners). These results may be explained by the structure of the supply chain and by the peculiar characteristics of the two cheeses.     

Market Failure and Japanese Farmland Rents

Since the early 1950s, Japanese farmland rents have been regulated and a consensus emerged that rent control led to market failure. Hypothesising a rent‐formation model where rents are determined by prices, this paper estimates a threshold autoregressive model which integrates three tests of market failure, namely, inefficiency, bias and asymmetry. There are four results. First, a long‐run relationship exists between rents and prices, and the Japanese farmland rental market is efficient. Second, the rent‐price elasticity is unity and the market is unbiased. Third, rents are Granger‐caused by prices which supports the rent‐formation model. Fourth, asymmetry exists where more rapid error‐correction occurs immediately after policy reform when rent growth exceeds price growth by 3.6% or more, and rent control has benefitted tenants.     

Information Access and Smallholder Farmers’ Market Participation in Peru

Previous studies have documented the effect of information and communications technology (ICT) on farmers’ market participation. We employ a triple‐hurdle model to examine the effect of internet and phones on Peruvian smallholder farmers’ market participation, marketplace choice, and volume decisions using household‐level data from the IV National Agricultural Census of Peru in 2012. Double matching at the district‐ and household‐levels is implemented to address potential selection bias. Results indicate a positive direct effect of internet and phones on farmers’ market participation and volume decisions on the national market. Those with ICT access are more likely to sell on the foreign market than those without ICT access. The marginal effects suggest that internet access tends to have larger impacts on volume decisions than phones. In addition to direct effects, we find that internet access has significant and positive spillover effects on market participation and volume decisions in the national market. Without implementing matching procedures, the magnitude of the ICT effect tends to be smaller. Results provide empirical support for policies and social programmes that promote ICT especially internet usage in rural Peru to improve smallholder farmers’ marketing performance.     

刍议水权市场的建立

从水权的初始分配制度、水权市场主客体的培育、空间结构及运行规则等方面,论述建立水权市场的步骤及其发展必需的各项配套制度体系,并对水权交易所制度及水权储备银行的设立进行了初步探讨。     

Access to a Telephone and Factor Market Participation of Rural Households in Bangladesh

This paper assesses the impact of access to a telephone on rural households’ factor market opportunities. It answers two questions. First, does the use of a telephone have any impact on rural households’ factor market participation? Second, correcting for market participation, does the use of a telephone have any impact on the type of factor market participation? For the first question, the paper uses a bivariate probit to correct for omitted variable bias and for the second question, the paper uses a two‐stage probit. The empirical findings suggest that access to a telephone has a significant positive impact on factor market participation. The difference in market participation between telephone users and non‐users is around 14%. However, once a household participates in the market, the use of a telephone does not have any impact on specific factor market participation.     

Market Imperfections and Land Productivity in the Ethiopian Highlands

This study analyses how market imperfections affect land productivity in a degraded low‐potential cereal‐livestock economy in the Ethiopian highlands. A wide array of variables is used to control for land quality in the analysis. Results of three different selection models were compared with least squares models using the HC3 heteroskedasticity‐consistent covariance matrix estimator. Market imperfections in labour and land markets were found to affect land productivity. Land productivity was positively correlated with household male and female labour force per unit of land. Female‐headed households achieved much lower land productivity than male‐headed households. Old age of household heads was also correlated with lower land productivity. Imperfections in the rental market for oxen appeared to cause overstocking of oxen by some households. Conservation technologies had no significant positive short‐run effect on land productivity. The main results were consistent across the different econometric models.     

Pricing to market behaviour of India's high value agri‐food exporters: an empirical analysis of major destination markets

The pricing behaviour of India's high value agricultural and food exporters in their major destination markets is examined using a pricing‐to‐market (PTM) model for noncompetitive and exchange rate related pricing behaviour. The analysis was undertaken in a context where India is showing high commodity concentration in agricultural trade. The econometric analysis employed is panel corrected standard errors (PCSE) estimation technique. The results indicated evidence of a greater degree of imperfect competition either through price discrimination across destinations or through imperfect exchange rate pass‐through. The analysis of exchange rate effects showed that the local currency price stabilization by the Indian exporters were more prominent than the amplification of exchange rates. The analysis of the asymmetric effects of exchange rates on export prices showed that in most cases the depreciation of Indian rupee had a greater impact than the appreciation. Moreover the results showed that the exchange rate pass‐through is sensitive to the kind of exchange rate index utilised. In our analysis we found that the commodity specific exchange rate better predicts the pricing to market behaviour in most cases.     

Volatility in Cereal Prices: Intra‐ Versus Inter‐annual Volatility

Intra‐annual (within crop year) price volatility and inter‐annual (between crop years) price volatility are measured for wheat, maize, rice, barley, oats and rye. A set of explanatory variables is used in a pooled regression to explain variations in these price volatilities. With low cereal stocks, supply (yield) shocks (defined here as volatilities, as for the price volatilities) mostly influence inter‐annual volatility while other influential factors are the crude oil price and exchange rate. Cereal demand and interest rate shocks combined with low stocks affect intra‐annual volatility, while other explanatory factors include exchange rate and crude oil price shocks. The derivatives market activity appears to have no significant effect on either intra‐ or inter‐annual volatility. In contrast, large cereal stocks and a well‐functioning international cereal market reduce the effects of shocks in the explanatory variables on both intra‐ and inter‐annual volatilities.     

Hedonic Valuation in an Urban High‐Rise Housing Market

This study estimates the effect of spatial heterogeneity and housing‐unit attributes on the value of apartment housing in a densely urban Chinese housing market. This paper contributes to the literature in two ways. First, high‐rise housing complexes present complications in that the vertical dimension is important in purchase decisions—yet the spatial econometric literature has focused exclusively on two dimensions. We introduce a three‐dimensional (3‐D) spatial weights matrix to capture the potential for “within project” correlation among housing units located on different floors within a project. Second, a significant proportion of the world's population lives in urban high‐rise buildings but the literature has, for the most part, completely ignored such markets. Test statistics support the use of a 3‐D weight matrix; our application of the hedonic methodology to a dense, vertical housing market shows that it can be used to value amenities located within or adjacent to housing complex amenities. In our empirical example, though, we observe little difference in marginal valuation of amenities under a 3‐D weight matrix relative to a standard 2‐D weight matrix.     

土地储备制度与土地市场均衡

研究目的:从土地市场均衡角度分析现行土地储备制度的运行机理,论证土地储备制度对土地市场调控的积极意义,围绕理论假设讨论实践中应注意的问题。研究方法:市场均衡理论,图解法。研究结果:从土地储备制度实施前后社会福利变化情况论证了这一制度实施的积极作用。研究结论:实施土地储备制度将改善政府和社会的福利状况,构建良好的土地市场秩序,但应当围绕克服市场主体的非理性、减少信息不对称和降低交易费用采取有效举措以求保障。     

Spatial Effects within the Agricultural Land Market in Northern Ireland

The importance of dealing properly with spatial effects, such as spatial autocorrelation, in cross‐sectional econometric estimation has become more widely recognised in recent years. Spatial autocorrelation is similar in many ways to serial correlation, but while the latter is ordered on a one‐dimensional time axis, the former is ordered in two dimensions. The multi‐directional nature of spatial dependence means that specialised techniques are needed for diagnostic testing and estimation purposes. This paper uses these specialised diagnostics to test for spatial effects within a hedonic pricing study of the agricultural land market. The tests indicate that spatial autocorrelation (in the form of spatial lag dependence) and spatially distinct sub‐markets (or spatial heterogeneity) are present. Ignoring these effects in the estimation process is likely to lead to biased parameter estimates. Consequently, we re‐specify the hedonic model to allow for these spatial effects. The presence of spatial lag dependence suggests that there is circularity of price setting within the agricultural land market. This means that agricultural land prices are not solely determined by the inherent characteristics of the land, but tend to reflect also the average local price per acre.     

Institutional Market Power in Comté: Insights from a ‘Double Marginalisation’ Model

This article explores the economic efficiency of a horizontally and vertically coordinated industry where upstream producers are atomised, but downstream processors are few, explicitly considering participation incentives and allowing the coordinated industry to exert market power towards buyers. The model offers insight into the probable social impacts of the government‐sanctioned supply control scheme in place in the French Comté cheese market, suggesting it falls short of constituting a Pareto‐improvement compared with a laissez‐faire situation. More generally, our theoretical model provides guidance to identify instances where encouraging industry coordination may be socially desirable. We formally introduce the concept of ‘seller‐equivalent degree of overall market power’ of the separated industry, a market characteristic comprised of measurable or inferable parameters, the value of which is shown to determine the potential for Pareto improvements through industry integration.     

The Effect of Market Orientation on Learning,Innovativeness, and Performance in Primary Agriculture

Market awareness and innovativeness are important resources in any business environment. As customer needs and competitor responses change, performance may depend on the ability for firms to recognize and react to market shifts. Using survey data from beef farmers in Illinois, we examine the role market orientation, organizational learning, and innovativeness play on satisfaction with performance. We use a structural equation model to find that market‐oriented and innovative firms are more satisfied with their performance while controlling for structural and demographic variables. Results also show that while market‐oriented firms are more innovative, human capital resources moderate the ability to exploit innovations. We also find that an increase in experience correlates with less organizational learning.     

Beyond One‐Size‐Fits‐All: Differentiating Market Access Measures for Commodity Systems in the Kenyan Highlands

Market access measures employed by economists and spatial analysts may not adequately capture local market or product‐specific variation. Analysis is conducted on the effects of market access on two commodities in the Kenyan highlands: milk and bean seeds. Both simple and composite measures of market access are applied to spatial price formation models to create spatial price decay functions in the context of household‐specific transaction costs. Composite measures of market access include negative exponential (using travel time or distance as cost) and gravity measures. The results demonstrate that the effects of market access differ significantly depending on the particular goods of interest. Simple measures of market access have the advantage of being more easily interpretable, and should therefore be preferred when communicating research outputs to the non‐scientific community, especially decision‐makers. The implications are that research addressing commodity‐specific development questions needs to look beyond generic measures of market access and develop tailored measures that reflect the characteristics of the commodity system of interest. The analysis also demonstrates that spatial price formation can be used to generate potentially more accurate measures of unit‐distance marketing costs.     

Social welfare effects of removing multiple exchange rates: evidence from the rice trade in Iran

In order to encourage the involvement of the private sector in importing rice, the Iranian government plans to relax the system of multiple foreign exchange rates applied to importers wishing to supply the domestic market. In this article, the welfare effects of removing the current controls on the rice trade, and a domestic rice coupon program, are evaluated by applying a partial equilibrium analysis to 1961–1999 data. The results show that, as far as foreign exchange is concerned, liberalization of the rice market causes an increase in rice imports, mainly due to a decrease in domestic supply. In welfare terms, the loss in producer surplus from rice market liberalization is relatively high, but most rice consumers, and the Iranian taxpayer, would gain. Overall, gains to consumers and taxpayers are estimated to be higher than the losses incurred by domestic suppliers, and therefore net social welfare at national level can be improved by rice market liberalization in Iran. Issues for further discussion include residual food security roles for the state, and supply‐side adjustments in terms of resource use and higher‐quality production.     

Evaluating Commodity Market Efficiency: Are Cointegration Tests Appropriate?

This paper investigates the claim that the finding of cointegration between commodity spot and lagged futures rates reflects the existence of commodity arbitrage and not, as is generally accepted, long‐run market efficiency. The methodology of Kellard et al. (1999) is employed to match spot and lagged futures rates correctly for the UK wheat futures contract traded at LIFFE. Bi‐variate analysis shows that spot and lagged futures rates are cointegrated with the vector (1, ‐1), a necessary condition for market efficiency. However, at variance with asymptotic theory, in a tri‐variate VECM estimation, the spot rate, lagged futures rate and lagged domestic interest rate are shown to be cointegrated with the vector (1, ?1, 1). The “cointegration” paradox is explained by investigating the relative magnitudes of the forecast error and the domestic interest rate. The small sample results demonstrate that it is impossible to distinguish between the influence of commodity arbitrage and the existence of market efficiency using cointegration‐based tests. In summary, this work implies that such tests are not wholly appropriate for evaluating commodity market efficiency.     

Eliciting Consumer WTP for Food Characteristics in a Developing Context: Application of Four Valuation Methods in an African Market

We elicit willingness to pay for conventional, organic and/or food‐safety‐inspected tomatoes in a traditional African food market. We identify four elicitation methods that can be conducted with one respondent at a time, and use them in a field setting: the Becker–DeGroot–Marschak mechanism, multiple price lists, multiple price lists with stated quantities, and real‐choice experiments. All four methods give similar results; showing that consumers are willing to pay a premium for organic and food‐safety‐inspected tomatoes. However, the size of the premium is significantly larger when consumers choose between alternatives than when they indicate their reservation price. The new multiple price lists with stated quantities were easy to explain in the busy market setting, gave the respondents the opportunity to determine the amount they wanted to buy, and had valuations in line with the other non‐comparative valuation methods.     

Black Sea and World Wheat Market Price Integration Analysis

In 2008–10, Russia and Ukraine together exported an average of 29 million tons of wheat per year, and have become important players in the international wheat market. This research summarizes the short‐ and long‐run wheat price dynamics between Ukraine and Russia, and other major wheat exporters—the United States, European Union (EU), and Canada—from 2004 to 2010. Tests of market price co‐integration (Johansen maximum likelihood test and residual‐based tests) as well as threshold error correction techniques were performed for this purpose. The results suggest that Russian wheat prices were co‐integrated with EU and U.S. wheat prices but not with Canadian wheat prices. Ukrainian wheat prices were found to be co‐integrated with French wheat prices only. The estimated long‐run wheat price transmission elasticities were estimated to be equal to 1.04 between Russian and French (a representative country of the EU) wheat prices, 1.16 between Russian and U.S. wheat prices, and 1.05 between Ukrainian and French wheat prices. We also found the short‐term relationships between the co‐integrated series to be statistically significant. Price adjustments in all co‐integrated prices were found to be symmetric.