IDEAS home Printed from https://ideas.repec.org/a/ags/ajaeau/22725.html
   My bibliography  Save this article

Decomposing The Variance Of Gross Revenue Into Demand And Supply Components

Author

Listed:
  • Piggott, Roley R.

Abstract

Some recent analyses relating to gross revenue instability have used a procedure for decomposing the variance of gross revenue into components attributable to price variability, quantity variability and interaction between these. This paper offers some criticisms of the procedure and outlines an alternative procedure which divides the variance of gross revenue into components due to demand variability, supply variability and interaction between these. The procedure is used to investigate the causes of instability in quarterly beef revenues in the Australian beef industry. Since demand and supply variability are both important contributors to beef revenue instability, direct market intervention to stabilise beef industry revenues would be a complex and risky task.

Suggested Citation

  • Piggott, Roley R., 1978. "Decomposing The Variance Of Gross Revenue Into Demand And Supply Components," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 22(2-3), pages 1-13, August.
    • Handle: RePEc:ags:ajaeau:22725
    DOI: 10.22004/ag.econ.22725
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/22725/files/22030145.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.22725?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Powell, Alan A., 1960. "Production And Income Uncertainty In The Wool Industry: An Aggregative Approach," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 4(1), pages 1-11, July.
    2. James P. Houck, 1973. "Some Aspects Of Income Stabilization For Primary Producers," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 17(3), pages 200-215, December.
    3. Oscar R. Burt & Robert M. Finley, 1968. "Statistical Analysis of Identities in Random Variables," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 50(3), pages 734-744.
    4. Arthur S. Goldberger, 1970. "On the Statistical Analysis of Identities: Comment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 52(1), pages 154-155.
    5. Houck, James P., 1973. "Some Aspects Of Income Stabilization For Primary Producers," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 17(3), pages 1-16, December.
    6. Oscar R. Burt & Robert M. Finley, 1970. "On the Statistical Analysis of Identities: Reply," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 52(1), pages 155-156.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Russell, James R. & Arap Rop, Isaac K. & Henneberry, David M., 1989. "Sources of Producer Income Instability in Kenya," 1989 Occasional Paper Series No. 5 197712, International Association of Agricultural Economists.
    2. Shimeles Abebe & Tiguéné Nabassaga, 2017. "Working Paper 246 - Why is inequality high in Africa?," Working Paper Series 2355, African Development Bank.
    3. Yiyang Qiao & Minseong Kang & Byeong-il Ahn, 2023. "Analysis of Factors Affecting Vegetable Price Fluctuation: A Case Study of South Korea," Agriculture, MDPI, vol. 13(3), pages 1-16, February.
    4. Thompson, Robert S., 2020. "Measuring the Relationship between Price and Yield," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304188, Agricultural and Applied Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John C. Quiggin & Jock R. Anderson, 1979. "Stabilisation And Risk Reduction In Australian Agriculture," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 23(3), pages 191-206, December.
    2. Houck, James P., 1973. "Some Aspects Of Income Stabilization For Primary Producers," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 17(3), pages 1-16, December.
    3. de Boer, A.J., 1977. "Rural Product Promotion: Economic Aspects Of Promotability, Organization And Public Assistance," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 45(04), pages 1-25, December.
    4. Alston, Julian M. & Freebairn, John W., 1988. "Producer Price Equalization," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 56(03), pages 1-34, December.
    5. Bilotto, Franco & Recavarren, Paulo & Vibart, Ronaldo & Machado, Claudio F., 2019. "Backgrounding strategy effects on farm productivity, profitability and greenhouse gas emissions of cow-calf systems in the Flooding Pampas of Argentina," Agricultural Systems, Elsevier, vol. 176(C).
    6. Veeman, M.M. & Veeman, T.S. & Dong, X.Y., 1989. "Market Share Competition in World Wheat Markets," Project Report Series 232074, University of Alberta, Department of Resource Economics and Environmental Sociology.
    7. Sturgess, Ian M., 1968. "The Wool Board'S Second Report On Marketing: A Review Article," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 12(2), pages 1-19, December.
    8. Tisdell, Clement A., 1972. "Some Circumstances In Which Price Stabilization By The Wool Commission Reduces Incomes," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 16(2), pages 1-8, August.
    9. Davis, Todd D. & Edwards, William M., 1995. "A Three-Year Level Study Of The Profitability Of - Corn And Soybean Production," 1995 Annual Meeting, August 6-9, Indianapolis, Indiana 271472, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. McBride, William D., 1997. "Change in U.S. Livestock Production, 1969-92," Agricultural Economic Reports 262047, United States Department of Agriculture, Economic Research Service.
    11. El Benni, Nadja & Finger, Robert, 2014. "Where is the risk? Price, yield and cost risk in Swiss crop production," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 95(3).
    12. Richardson, James W. & Mapp, Harry P., 1976. "Use of Probabilistic Cash Flows in Analyzing Investments Under Conditions of Risk and Uncertainty," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 8(2), pages 19-24, December.
    13. S. Severini & A. Tantari & G. Di Tommaso, 2016. "Do CAP direct payments stabilise farm income? Empirical evidences from a constant sample of Italian farms," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 4(1), pages 1-17, December.
    14. Boisvert, Richard N. & Bills, Nelson L., 1984. "Variability Of New York'S Agricultural Use Values And Its Implications For Policy," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 13(2), pages 1-10, October.
    15. Langemeier, Michael R. & Schroeder, Ted C. & Mintert, James R., 1992. "Determinants Of Cattle Finishing Profitability," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 24(2), pages 1-7, December.
    16. Lawrence, John & Wang, Zhi & Loy, Dan, 1999. "Elements of Cattle Feeding Profitability in Midwest Feedlots," ISU General Staff Papers 199901010800001486, Iowa State University, Department of Economics.
    17. Tew, Bernard V. & Boggess, William G., 1984. "Risk-Return Assessment Of Irrigation Decisions In Humid Regions: An Extension," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 16(2), pages 1-2, December.
    18. Chang, Hung-Hao & Boisvert, Richard N. & Tauer, Loren W., 2007. "PR - Quantifying The Sources Of Dairy Farm Business Risk And Understanding The Implications For Risk Management Strategies," 16th Congress, Cork, Ireland, July 15-20, 2007 345363, International Farm Management Association.
    19. Ali, Mir B. & Brooks, Nora L. & McElroy, Robert G., 2000. "Characteristics of U.S. Wheat Farming: A Snapshot," Statistical Bulletin 262288, United States Department of Agriculture, Economic Research Service.
    20. Boggess, William G. & Lynne, Gary D. & Jones, James W. & Swaney, D.P., 1983. "Risk-Return Assessment Of Irrigation Decisions In Humid Regions," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 15(1), pages 1-9, July.

    More about this item

    Keywords

    Demand and Price Analysis;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ajaeau:22725. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaresea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.