SEMI-STRONG FORM EVALUATION OF THE EFFICIENCY OF THE HOG FUTURES MARKET

Forward pricing is a primary role of livestock futures markets. A semi-strong form test of efficiency examines whether or not the prices in a market reflect all publicly available information. An econometric forecasting model is constructed to serve as a norm against which to test futures market forward-pricing abilities. Utilizing alternative methods of evaluation, results demonstrate that the live-hog futures market cannot be relied upon to reflect accurately and consistently subsequent cash prices; hence, it is inefficient. © 1978 by the American Agricultural Economics Association.