Dorfman, Jeffrey H.

By: Worley, Julian ; Dorfman, Jeffrey H. ; Russell, Levi A.
The impact of breed on carcass characteristics in various breeds of cattle has been well documented. This paper attaches these differences in breed characteristics to end revenue via different breed and breed combinations, percentage of Angus in pedigree, and purebred status. We find that while the genetics of many breeds is priced roughly in line with its value, some breeds are overpriced or underpriced by enough to significantly improve a cattle operation's profitability. We find that, relative to a pure Angus base, most breeds are less profitable in terms of carcass revenue per hundredweight.
By: Schnake, Kristin N.; Karali, Berna; Dorfman, Jeffrey H.
Futures markets have two main goals: price discovery and risk management. Because management decisions often have to be made on a time horizon longer than the time until expiration of the nearby futures contract, it is important to determine how well distant-delivery futures contracts are able to assist in price discovery. We focus on soybean and live cattle distant-delivery futures contracts and test for the informational value added to nearby contracts. Two tests for information value provide partially conflicting results due to the different information measures employed. If being able to predict the price trend is sufficient, then we find some information value in distantdelivery futures contracts, while if accurate point estimates of future spot prices are desired the results are negative. Surprisingly, we do not find the expected dichotomy between the storable (soybeans) and non-storable (cattle) commodities.
By: Rahman, Shaikh Mahfuzur; Dorfman, Jeffrey H.; Turner, Steven C.
Cottonseed crushers face substantial risk in terms of input and output price variability and they are limited in their planning by the lack of a viable futures contract for cottonseed or cottonseed products. This study examines the feasibility of cross-hedging cottonseed products using the soybean complex futures. Different cross-hedging strategies are evaluated for eight time horizons relative to the expected profit and utility of the crusher. A Bayesian approach is employed to estimate both model parameters and optimal hedge ratios, allowing consistency with expected utility maximization in the presence of estimation risk. The results reveal that both whole cottonseed and cottonseed products can be successfully cross-hedged using soybean complex futures. The profitability of cross-hedging cottonseed products depends on the size of the contract, the optimal choice of strategy, the time of hedge placement, and the hedging horizon.
By: Dorfman, Jeffrey H.; Keeler, Andrew G.; Kriesel, Warren
This article extends the literature on economic valuation of public interventions that reduce environmental risk. We consider the case where risk-reducing interventions have different characteristics than the risk proxies used in hedonic regressions. We then demonstrate the importance of these considerations by reexamining an existing analysis of shoreline protection where we estimate risk using a latent variables model. The results show substantially different and arguably more plausible results.