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Forecasting Prices at the Dutch Flower Auctions

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  • Marie Steen
  • Ole Gjølberg

Abstract

Prices at the Dutch flower auctions are extremely volatile. Price changes of +/‐20 per cent one week to the next represents a normal event, and +/‐50 per cent is not uncommon. Since production planning in the flower business offers a complicated variation over the Newsboy Problem, good price forecasts would improve decision making on space allocation; what species to plant; the timing of harvesting, etc. This paper analyses weekly prices for three major species, i.e., roses, chrysanthemums and carnations, 1993–1996. We find that there are strong calendar regularities particularly for roses and chrysanthemums. Establishing a model in which we combine information on seasonal regularities and autoregressive price patterns, we manage to explain a substantial part of the short‐term price variability for all three species. The model is tested in an out‐of‐sample dynamic forecasting experiment during the first 35 weeks of 1997.

Suggested Citation

  • Marie Steen & Ole Gjølberg, 1999. "Forecasting Prices at the Dutch Flower Auctions," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(2), pages 258-268, May.
    • Handle: RePEc:bla:jageco:v:50:y:1999:i:2:p:258-268
    DOI: 10.1111/j.1477-9552.1999.tb00812.x
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    References listed on IDEAS

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    1. Garber, Peter M, 1990. "Famous First Bubbles," Journal of Economic Perspectives, American Economic Association, vol. 4(2), pages 35-54, Spring.
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    Cited by:

    1. A. Selvaraj, 2011. "Price Behaviour of Jasmine Flower: A Study in Erode District of Tamil Nadu," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 2(1), pages 149-157, January.
    2. Button, Kenneth, 2020. "The economics of Africa's floriculture air-cargo supply chain," Journal of Transport Geography, Elsevier, vol. 86(C).
    3. Kusumastuti, Ratih Dyah & Donk, Dirk Pieter van & Teunter, Ruud, 2016. "Crop-related harvesting and processing planning: a review," International Journal of Production Economics, Elsevier, vol. 174(C), pages 76-92.

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