Agric. Econ. - Czech, 2020, 66(12):519-526 | DOI: 10.17221/239/2020-AGRICECON

A Bayesian analysis of hop price fluctuationsOriginal Paper

Douglas MacKinnon ORCID...*,1, Martin Pavlovič1,2
1 Department of Agriculture Economics and Rural Development, Faculty of Agriculture and Life Sciences, University of Maribor, Maribor, Slovenia
2 Slovenian Institute of Hop Research and Brewing, Žalec, Slovenia

This paper quantifies the correlation between U.S. season average prices for hops with U.S. hop stocks and U.S. hop hectarage. The Hop Equilibrium Ratio, a measure of the supply/demand relationship for U.S. hops, was introduced. Through the Bayesian inference method, the authors used these data to calculate the effect an incremental change to one metric had on the probability of directional changes of future U.S. season average prices (SAP). Between 2010 and 2020, the dominance of proprietary varieties created unprecedented cartel-like powers offering opportunities for supply- and price-management. Research results will enable more accurate forecasting and greater price stability in the hop industry.

Keywords: alpha-acids; Bayesian theorem; brewing industry; economies of scale; equilibrium; hop market

Published: December 31, 2020  Show citation

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MacKinnon D, Pavlovič M. A Bayesian analysis of hop price fluctuations. Agric. Econ. - Czech. 2020;66(12):519-526. doi: 10.17221/239/2020-AGRICECON.
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