This research compares derivative pricing model and statistical time‐series approaches to hedging. The finance literature stresses the former approach, while the applied economics literature has focused on the latter. We compare the out‐of‐sample hedging effectiveness of the two approaches...

This study tests causal hypotheses emanating from theories of futures markets by utilizing methods appropriate for disproving causal relationships with observational data. The hedging pressure theory of futures markets risk premiums, the generalized version of the normal backwardation theory of...