Date of Award

12-2010

Document Type

Thesis

Degree Name

Master of Science (MS)

Legacy Department

Applied Economics and Statistics

Advisor

Isengildina-Massa, Olga

Committee Member

Bridges , William

Committee Member

Isengildina-Massa , Olga

Committee Member

Gerard , Patrick

Abstract

The dynamic and volatile nature of agricultural markets causes individuals to rely on forecasts in their decision-making. WASDE cotton forecasts are shown to be especially volatile as cotton is one of the most trade dependent commodities in the world. Therefore, its evaluation requires us to look beyond U.S. WASDE categories and evaluate forecasts for China and the World.
This study will use data from monthly WASDE balance sheets for upland cotton for the U.S, China and World over 1985/1986 through 2008/2009 including unpublished price forecasts. The results of this study will provide information that can be used to improve the accuracy of USDA cotton forecasts. The proposed study will fill the gap in knowledge of the level of supply and demand forecast uncertainty and its contribution to price forecast errors by 1) evaluating all weak-form forecast optimality conditions for the U.S., China and World balance sheet categories for cotton, including trends in forecast accuracy; 2) investigating whether errors in forecasts are correlated with the U.S., China and World balance sheet categories, and 3) identifying a statistical correction of systematic errors in independent variables of the U.S. cotton price model.

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