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The Causality Between U.S.A. and Australian Wheat Prices

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  • Sniekers, Peter
  • Wong, Gordon

Abstract

It has been generally agreed that Australia is a price follower on the world wheat market. However, to date, this has not been tested empirically. In this paper a transfer function model between prices of U.S.A. wheat and Australian wheat is set up to examine the existence, if any, of a leader-follower relationship. By employing the causality criteria as described by Granger, this analysis is implemented to draw inferences about causality among these wheat prices. Results indicated that a significant leader-follower relationship exists, with the U.S.A. taking the leader role. The results reported are particularly useful for wheat price forecasting work and provide a basis for further modelling work.

Suggested Citation

  • Sniekers, Peter & Wong, Gordon, 1987. "The Causality Between U.S.A. and Australian Wheat Prices," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 55(01), pages 1-14, April.
    • Handle: RePEc:ags:remaae:12313
    DOI: 10.22004/ag.econ.12313
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    References listed on IDEAS

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    1. Grant, Warren R. & Ngenge, Anthony Wawa & Brorsen, B. Wade & Chavas, Jean-Paul, 1983. "Grain Price Interrelationships," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 35(1), pages 1-9, January.
    2. Chris M. Alaouze & A. S. Watson & N. H. Sturgess, 1978. "Oligopoly Pricing in the World Wheat Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(2), pages 173-185.
    3. John Spriggs & Michael Kaylen & David Bessler, 1982. "The Lead-Lag Relationship between Canadian and U.S. Wheat Prices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(3), pages 569-572.
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