Modelling dynamic storage function in commodity markets: Theory and evidence

C-Tier
Journal: Economic Modeling
Year: 2008
Volume: 25
Issue: 5
Pages: 1080-1092

Authors (2)

Pieroni, Luca (Department of Political Scienc...) Ricciarelli, Matteo (not in RePEc)

Score contribution per author:

0.503 = (α=2.01 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In this work, we derive a model to investigate the optimal storage policy in metal commodity markets. From an inter-temporal setting, we carry out a criterion driving the stockholding decisions based on Tobin's q rule in which marginal benefits from holding inventories can be compared with marginal storage costs. We estimate the model for the world copper market by taking into account both spot price and convenience yield equations. In our sample, the estimated models are statistically robust and economically coherent with the theory, even though the patterns of the inventory accumulation process show high sensitivity to the uncertainty about worldwide economic conditions.

Technical Details

RePEc Handle
repec:eee:ecmode:v:25:y:2008:i:5:p:1080-1092
Journal Field
General
Author Count
2
Added to Database
2026-01-29