No abstract

Despite extensive study, researchers continue to search for consistent and reliable measures of risk preferences to explain market behavior. We find that a measure, combining experiments rooted in expected utility theory and measures derived from surveys, explains spot and contractual sales, but does not exhibit substantially greater explanatory power than its underlying components. Survey-based measures are generally more significant indicators of marketing choices, but experimental measures reveal how risk attitudes vary over a range of probable outcomes, which is important in light of increased commodity price volatility. Given recently identified limitations on the applicability of expected utility theory, we suggest that researchers include survey methods to obtain low-cost supplemental measures.JEL classifications: D03, D81, M31, Q13

This study investigates factors influencing coordination of the California grape and wine supply chain. Results corroborate prior findings that quality considerations and needs to protect investments in specialized or durable assets significantly increase usage of more formal coordination mechanisms, such as formal contracts and vertical integration or ownership. Consistent with findings for other industries, such investments are associated with greater contract complexity and inclusion of enforcement provisions, while trade partners' prior experience working together decreases contract complexity. Furthermore, our results suggest that quality considerations extend to greater use of formal contracts further downstream. (JEL Classifications: L1, L2, Q13)

Numerous crop marketing and risk management tools are available. Research relating producers' risk attitudes to their use of these tools has produced mixed results, and most studies focus on individual tools, neglecting potential complementarities in information they provide. Little is known about the proportion in which individual tools are used, e.g., the percentage of the crop that is forward sold as opposed to hedged. This study identifies factors, including risk attitude, that impact the proportion of corn and soybean producers' sales through spot markets, futures, and options, as well as forward and production contracts, and investigates contract complementarity and substitutability using survey and accounting data, and causal modeling. [Econ Lit classification: Q130]. C 2012 Wiley Periodicals, Inc. 1 Bryant et al.'s (2006) evaluation of causal hypotheses stemming from theories of futures markets is perhaps the most familiar application of causal analysis. The authors rejected hypotheses regarding the hedging pressure theory of futures market risk premiums (i.e., the generalized version of Keynes' [1930] normal backwardation theory) and theories that speculative activity affects price volatility.

This study investigates factors influencing coordination of winegrape procurement in emerging wine regions in Michigan, Missouri, and New York. Wineries in these emerging regions face different vertical coordination challenges than in well‐established regions, which may affect procurement choices. Results corroborate prior findings that quality considerations and the need to safeguard investments in specialized assets, respectively, increase usage of more formal coordination mechanisms like written contracts and vertical integration or ownership. Consistent with prior findings of studies of wineries in established wine regions, we find that perceived difficulty in measuring grape quality attributes leads to tighter coordination; a point previously undocumented for emerging regions. [EconLit citation: Q130]

This research examines whether mandatory price reporting (MPR) impacted price relationships among U.S. hog markets. Markets are cointegrated before and after MPR enactment, but not fully integrated in either period. Terminal markets adjust to shocks in the Iowa-Southern Minnesota market more quickly and Iowa-Southern Minnesota prices adjust to shocks in terminal markets more slowly following MPR enactment. Granger causality tests indicate a causal flow from terminal markets to Iowa-Southern Minnesota prices before MPR and a causal reversal after MPR enactment. These results likely reflect decreases in volume of negotiated sales, particularly in terminal markets, and greater reliance on mandatorily reported prices for market information.

A limited inquiry into cooperative governance and performance suggests that best practices from corporate governance literature may not apply uniformly to cooperatives. The rarely addressed issue of endogeneity limits confidence in recommendations for corporations and cooperatives alike and inference of recommendations for cooperatives is complicated by availability of appropriate performance measures. By accounting for the most commonly recognized sources of endogeneity and measuring overall cooperative performance, expectations of better performance by larger cooperatives with smaller boards are confirmed, while limited evidence is obtained on the expected positive effects of seating outside experts on the board.

This study examines vertical coordination in the wine industry emerging in Illinois. We find that quality matters as temporal issues related to grape perishability increase the probability of written contracts being used to procure grapes. Holdup concerns related to sourcing adequate quality grapes and at-risk investments in grape storage and winemaking equipment lead to vertical integration. In general, larger wineries must obtain some grapes from outside vineyards and sell wine predominantly through tasting rooms and distributors. Smaller wineries rely more on direct sales to retailers, festivals, and farmers' markets. Marketing outlet selection also reflects the types of wine produced.