Campus Units
Economics
Document Type
Article
Publication Version
Submitted Manuscript
Publication Date
2014
Journal or Book Title
Agribusiness
Volume
30
Issue
3
First Page or Article ID Number
309
Last Page
330
DOI
10.1002/agr.21364
Abstract
Cointegration was tested between organic and conventional corn and soybean markets in several locations throughout the U.S. using a unique dataset. Organic prices were found to behave like pure jump processes rather than diffusions. A simple specification for pure jump processes is introduced and used with Monte Carlo methods to compute appropriate critical values for unit-root and cointegration tests. The findings indicate that no long-run relationship exists between organic and conventional prices, implying that price determination for organic corn and soybean is independent from that of the conventional crops. This suggests that organic corn and soybean prices are driven by demand and supply forces idiosyncratic to the organic market. For each crop, cointegrating spatial relationships are found between prices at the main organic markets. However, such relationships are generally weaker than the ones for the corresponding conventional prices, implying that organic markets are more affected by idiosyncratic shocks than conventional markets.
Copyright Owner
Wiley Periodicals, Inc.
Copyright Date
2014
Language
en
File Format
application/pdf
Recommended Citation
Singerman, Ariel; Lence, Sergio H.; and Kimble-Evans, Amanda, "How Related Are the Prices of Organic and Conventional Corn and Soybean?" (2014). Economics Publications. 66.
https://lib.dr.iastate.edu/econ_las_pubs/66
Included in
Agricultural and Resource Economics Commons, Growth and Development Commons, Regional Economics Commons
Comments
This is the peer reviewed version of the following article: Agribusiness Volume 30, Issue 3, pages 309–330, Summer 2014, which has been published in final form at http://dx.doi.org/10.1002/agr.21364. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.