An Objective System for Cotton Price Discovery
An automated price reporting system using computer technology and hedonic price theory is used to estimate daily cotton market prices, premiums, and discounts. This objective approach for reporting cotton market prices was developed to complement the objective measures of high volume instrument grading of cotton. The system is limited to the Texas and Oklahoma marketing regions where sales are readily available from electronic markets. It contains all the characteristics of an efficient price reporting system; it is accurate, reliable, consistent, and repeatable in its working process and price estimates. In this paper, market prices, premiums, and discounts for the first portion of the 1993 marketing year as estimated by the Daily Price Estimation system are presented.