IDEALS Home University of Illinois at Urbana-Champaign logo The Alma Mater The Main Quad

Commodity Futures Contract Viability: A Multidisciplinary Approach

Show full item record

Bookmark or cite this item: http://hdl.handle.net/2142/4027

Files in this item

File Description Format
PDF ofor99-02.pdf (120KB) Paper PDF
Title: Commodity Futures Contract Viability: A Multidisciplinary Approach
Author(s): Pennings, Joost M.E.; Leuthold, Raymond M.
Subject(s): structural equation models multiple regression models
Abstract: We propose a development process of commodity futures contracts in which the decisions and wishes of potential customers are investigated simultaneously with the necessary technical properties that need to be met for trading to take place. Within this framework the relationship between trading volume and hedging effectiveness is examined taking both basis risk and market depth risk into account, and the relationship between owner-manager's characteristics and the probability of using futures is examined, taking latent variables and the heterogeneity of owner-managers into account. The relationships are tested on a set of data gathered in a stratified sample of 440 owner-managers by means of computer-assisted personal interviews and on transaction-specific futures data. Structural equation models and multiple regression models are used to validate the relationships. The hedging effectiveness and the variables that play a role in the owner-manager's use of futures are related to the tools of the exchange.
Issue Date: 1999-05
Publisher: Office for Futures and Options Research, Department of Agricultural Economics, College of Agricultural, Consumer, and Environmental Sciences at the University of Illinois at Urbana-Champaign
Series/Report: OFOR Working Paper Series, no. 99-02
Genre: Working / Discussion Paper
Type: Text
Language: English
URI: http://hdl.handle.net/2142/4027
Publication Status: published or submitted for publication
Peer Reviewed: not peer reviewed
Date Available in IDEALS: 2008-03-17
 

This item appears in the following Collection(s)

Show full item record

Item Statistics

  • Total Downloads: 240
  • Downloads this Month: 3
  • Downloads Today: 0

Browse

My Account

Information

Access Key