New Evidence on the Value of Public Information in Commodity Markets

OFOR Working Paper Number 94-04

Posted: 29 Oct 2000  

Philip Garcia

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics

Scott H. Irwin

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics

Raymond M. Leuthold

University of Illinois @ Urbana-Champaign

Li Yang

Western Michigan University

Abstract

The informational value of USDA corn and soybean production forecasts is investigated for the period 1971-1992. Three tests of informational content are considered: i) a relative forecast accuracy test, ii) a price reaction test, and iii) a willingness-to-pay test. Overall, the results suggest USDA corn and soybean forecasts provide valuable information to commodity markets. This value, however, does appear to have declined, especially since the mid-1980s. This is consistent with large declines in the cost of information due to technological improvements in computers, communications equipment, remote-sensing satellites, etc.

JEL Classification: 14

Suggested Citation

Garcia, Philip and Irwin, Scott H. and Leuthold, Raymond M. and Yang, Li, New Evidence on the Value of Public Information in Commodity Markets. OFOR Working Paper Number 94-04. Available at SSRN: https://ssrn.com/abstract=5500

Philip Garcia

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics ( email )

1301 W. Gregory Drive
427 Mumford Hall
Urbana, IL 61801
United States
217-333-0644 (Phone)
217-333-5538 (Fax)

Scott H. Irwin

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics ( email )

1301 W. Gregory Drive
326 Mumford Hall, MC-710
Urbana, IL 61801
United States

Raymond M. Leuthold (Contact Author)

University of Illinois @ Urbana-Champaign ( email )

1301 W. Gregory Drive
326 Mumford Hall
Urbana, IL 61801
United States
217-333-1810 (Phone)
217-333-5538 (Fax)

Li Yang

Western Michigan University

Dept. of Computer Science
Kalamazoo, MI 49008
United States

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