he efficiency of futures pricing has been investigated using the model: T S,+i = a + bF:+i + e,+i (1) where St+i is the spot price at t + i; F:+i is the price at t for the futures contract maturing at t + i; e,+i is a random disturbance with mean zero and variance a : ; and a and b are fixed parameters. Pricing is considered efficient if a = 0 and b = 1. However, empirical estimates of the a's have generally been positive and the b's less than one, at least for futures contracts several weeks before maturity (e.g., Bigman, Goldfarb and Schechtman (1983) ' Leuthold (1974)). From such results it has been concluded that futures prices provide inefficient (or biased) estimates of the futures (or spot) prices at contract maturity.In an article in this journal, Maberly (1985) disagrees with the conclusion that a^ > 0 and b < 1 (where A denotes an estimate) imply that futures pricing is inefficient. He argues that the empirical findings are the result of applying ordinary least squares (OLS) to censored data. He believes that an inherent restri9ion on the dependent variable in Equation (1) is responsible for a^ > 0 and b < 1. More details of Maberly's argument follow.The objective of this paper is to, show that the censoring argument is incorrect. The reason for a^ > 0 and b < 1 can be attributed to using OLS on a model with a lagged dependent variable. In what follows, Maberly's argument is critiqued and an alternative argument is made as to why the customary test of a = 0 and b = 1 is not valid. This argument is then supported with Monte Carlo evidence.

This research examined the impacts of improvement in landscape quality and exterior house features on residential property values. These two combined factors are referred to as ‘curb appeal’ — i.e., the visual appearance of a property as viewed from the curb in front of a house. It is well understood regarding residential property that curb appeal affects house value, but a quantitative estimate of the size/magnitude of the effect is not available. This study developed a quantitative indicator of curb appeal, included it in a hedonic house pricing model, and determined its independent effect on values. Results confirmed that curb appeal has a positive impact on house value, with landscape and house appearance approximately equal in impact. With improved curb appeal, house price can increase up to 17%.

onsiderable controversy exists over the amount of risk in futures markets.C Keynes (1930, p. 137; see Peck 1983, p. 68) believed that futures prices are quite variable and thus price risk is associated with the ownership of futures contracts. He believed that risk premiums are paid by hedgers to speculators for bearing risk.' Keynes estimated the risk premiums to be sizable-that is, on the order of 10 to 20% per annum.A different approach to examining risk is provided by the capital asset pricing model (CAPM). According to the CAPM, risk-which is called systematic risk in CAPM terminology-is determined from the covariance between the return on an asset and the return on the market portfolio of all assets. As the covariance increases, the risk associated with the ownership of an asset increases. An asset whose return has a high covariance with the return on the market portfolio is risky because including it in a portfolio increases the variability of the portfolio's return. By contrast, an asset whose return has a low covariance with the return on the market portfolio is not risky because including it will have little effect on the variability of the portfolio's return. Dusak (1973) first applied the CAPM to commodities and found that the returns from owning wheat, corn, and soybean futures had essentially zero covariance with the return on the market portfolio. She concluded that even though grain and soybean futures prices are quite variable, ownership of futures *This research was partially completed while Emmett Elam and Daniel Vaught were Assistant Professor and Graduate Research Assistant, respectively, at the Dept. of Agricultural Economics and Rural Sociology, University of Arkansas.'Speculators, as a lot, were viewed as providing insurance against changes in prices and not as prophets of what prices would be in the future. In Keynes' (see Peck, 1983, p. 67) words, Indeed without paying the slightest attention to the prospects of the commodity he [speculator] deals in or giving a thought to it, he may, one decade with another, earn substantial remuneration merely by running risks and allowing the results of one season to average with those of others just as an insurance company makes profit without pretending to know more about an individual's prospects of life or the chances of his house taking fire than he knows himself.

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The Rice Outlook and Situation (RO&S) forecasts were compared to the forecasts of a univariate Box-Jenkins (BJ) model. On balance, the RO&S forecasts had lower mean square forecast errors and lower mean absolute forecast errors than the BJ model forecasts. The differences in the squared and absolute forecast errors were not significant, however. Based on the concept of conditional efficiency as set forth by Granger and Newbold, it was found that the BJ forecasts did not add any information that might improve forecast accuracy beyond what was already incorporated in the RO&S forecasts.

This paper compares hedging risk for various weights of feeder cattle hedged with a traditional cross hedge and a ratio cross hedge. A traditional hedge calls for the purchase/sale of one pound of futures for each pound of cash feeder cattle. By contrast, a ratio hedge requires estimation of a hedge ratio to determine the number of pounds of futures needed to hedge one pound of cash feeder cattle. Hedge ratios were found to be larger than 1.0 for light-weight feeder cattle. By using the estimated hedge ratios, it was shown that hedging risk could be reduced 20-50 percent compared to that achieved by using a hedge ratio of 1.0.

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Feasibility of forward pricing sales of rice bran via cross-hedging was investigated. Corn, oats, wheat, and soybean meal futures were considered as simple and multiple cross-hedging media. Simulation results indicated that simple cross-hedging using corn futures would be most effective in reducing price risks.