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Challenges related to beef-cattle pricing between a western block and a third world country

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dc.contributor.supervisor Lungu, Edward M.
dc.contributor.author Ziwakaya, Paul Kundai
dc.date.accessioned 2023-05-10T13:37:35Z
dc.date.available 2023-05-10T13:37:35Z
dc.date.issued 2021-06-06
dc.identifier.citation Ziwakaya,P. K. (2021) Challenges related to beef-cattle pricing between a western block and a third world country, Master's Thesis, Botswana International University of Science and Technology: Palapye. en_US
dc.identifier.uri https://repository.biust.ac.bw/handle/123456789/556
dc.description Thesis (MSc of Science in Pure and Applied Mathematics)---Botswana International University of Science and Technology, 2021 en_US
dc.description.abstract This study considers a business scenario involving three participants. The first participant, in this case the farmer sells the cattle to the second participant, in this case the Botswana Meat Commission (BMC) which, in turn sells the processed beef to the European Union (EU). The BMC offers a price, S1(t), to the farmer for the cattle. The EU offers a price, S2(t), to the BMC. To estimate the parameters spot prices of beef-cattle from the BMC and the EU markets for years 1992 to 2018 were used. This study considers the relationship between S1(t) and S2(t), how the two prices are correlated and whether there is any seasonal dependence on the prices. First, we constructed a bivariate model which showed strong correlation between the prices S1(t) and S2(t) and that the residue between S1(t) and S2(t) is explained by a white noise process. Based on this result, we constructed a stochastic model for the farmer price, S1(t), of the Ornstein-Uhlenbeck type where the EU price is assumed as the mean. Several scenarios arose from the stochastic model covering a number of possibilities ranging from collapse of the business for the farmer to thriving business with mean reverting returns. The study gives insight why the BMC which is caught in between the farmer and the EU is experiencing operational problems financially. en_US
dc.description.sponsorship Simons Foundation, through the Administrative Board, the Research and Graduate Studies in Mathematics and its Applications (RGSMA) en_US
dc.language.iso en en_US
dc.publisher Botswana International University of Science and Technology (BIUST) en_US
dc.subject Stochastic mean en_US
dc.subject Mean-reversion en_US
dc.subject Geometric Mean Reversion en_US
dc.subject Beef-cattle price en_US
dc.subject Quasi-stability. en_US
dc.subject Cointegration en_US
dc.subject Transfer function en_US
dc.title Challenges related to beef-cattle pricing between a western block and a third world country en_US
dc.description.level msc en_US
dc.description.accessibility unrestricted en_US
dc.description.department mss en_US


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