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BROWN, KATHRYN A., M.S. a Review of the Effects of Australian Wool Marketing Initiatives on the Associations Between Selected Variables in the Global Wool Market

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BROWN, KATHRYN A., M.S. a Review of the Effects of Australian Wool Marketing Initiatives on the Associations Between Selected Variables in the Global Wool Market BROWN, KATHRYN A., M.S. A Review of the Effects of Australian Wool Marketing Initiatives on the Associations Between Selected Variables in the Global Wool Market. (2005) Directed by Dr. Peter Kilduff. 194pp. Wool, one of the oldest textile fibers, remains an important textile fiber today. However, wool has been in relative decline for more than 100 years, in the process, shifting from a commodity to a luxury good. Nearly a quarter of a century has passed since the last two significant studies on wool consumption were published - Tisdell’s (1977) review of the global wool market and Kirby and Dardis’s (1992) analysis of demand for textile fibers in the United States textile industry. There is a need to expand and update the literature. In particular, research is needed that tests the association of a broader array of demand and supply-side variables with fiber consumption. This research employs independent variable analysis and odds ratio analysis techniques to build upon previous studies’ explorations of the associations between key independent variables and changes in global mill consumption of Australian wool from 1981 to 2001. Results suggest that fiber prices have the strongest association with Australian wool consumption. Findings also suggest that the associations between the variables reviewed and Australian wool consumption vary greatly across changing periods of wool marketing programs. A REVIEW OF THE EFFECTS OF AUSTRALIAN WOOL MARKETING INITIATIVES ON THE ASSOCIATIONS BETWEEN SELECTED VARIABLES IN THE GLOBAL WOOL MARKET by Kathryn A. Brown A Thesis Submitted to the Faculty of The Graduate School at The University of North Carolina at Greensboro In Partial Fulfillment of the Requirements for the Degree Master of Science Greensboro 2005 Approved by ____________________________________ Committee Chair To my parents, George and Gaye, and my sister, Susan. My family has always been with me contributing their wisdom, love, and laughter. Without the love and support of my family I would have never come this far. ii APPROVAL PAGE This thesis has been approved by the following committee of the Faculty of The Graduate School at The University of North Carolina at Greensboro. Committee Chair ________________________________ Committee Members _______________________________ _______________________________ _____________________________ Date of Acceptance by Committee ____________________________ Date of Final Oral Examination iii ACKNOWLEDGEMENTS No project of any size can be undertaken without the help of others. I owe profound gratitude to the many people whose support helped me throughout the completion of this work. I would like to acknowledge, and send heartfelt appreciation to, Dr. Peter Kilduff. Throughout my efforts, Dr. Kilduff has supported and guided me, and has been a true mentor. I would also like to recognize Dr. Barbara and Dr. Carl Dyer. It is quite possible that without their help and guidance, I could still be sitting with only a pile of notes today. I also extend my thanks to the additional faculty and staff members who have helped my thesis become a reality. And lastly, to the Textile Products Design and Marketing Department at the University of North Carolina at Greensboro. The department has molded my education and provided me with the tools necessary to follow my academic pursuits. iv TABLE OF CONTENTS Page LIST OF TABLES………………………………………………………………….......viii LIST OF FIGURES .........................................................................................................viii CHAPTER I. INTRODUCTION............................................................................................... 1 The Importance of Wool Fiber ............................................................ 1 Previous Reviews................................................................................. 4 Research Questions.............................................................................. 4 Research Objectives............................................................................. 6 Contribution of this Work.................................................................... 8 II. REVIEW OF LITERATURE.............................................................................. 9 Introduction..................................................................................................... 9 History of the Australian Wool Industry ......................................................... 9 Responses by the Australian Wool Industry Since 1980............................... 15 Australian Wool Industry Responses to Changing Demand and Supply Conditions Prior to 1990............................................................ 15 Industry Responses to Changing Demand and Supply Conditions Since 1990........................................................................................................ 18 Promotion & Research Funding................................................................... 21 Current Market Conditions .......................................................................... 25 Fiber Consumption Literature......................................................................... 27 Overview of Associated Variables............................................................... 27 Demand-side Variables Associated with Wool Consumption..................... 29 Supply-side Variables Associated with Wool Consumption....................... 32 Wool Consumption Indicators ..................................................................... 39 Conclusions from the Literature Review ..................................................... 42 III. METHODOLOGY ............................................................................................. 44 Introduction..................................................................................................... 44 Selections of Wool Consuming Nations......................................................... 45 Selection of Variables Reviewed.................................................................... 45 Supply Side Variables.................................................................................. 46 Demand Side Variables................................................................................ 49 v Analysis........................................................................................................... 51 Independent Variable Analysis Technique .................................................. 52 Method of Variable Review............................................................................ 53 Conversion of Influencing Variables for Association Analysis .................. 53 Binomial Odds Ratio Analysis..................................................................... 54 Organization of Results…………………………………………………..56 IV. RESULTS.......................................................................................................... 58 Review of Australian Wool Consumption...................................................... 58 Fiber Supply.................................................................................................... 61 Variable Review........................................................................................... 61 Question 1: What is the likely association between each explanatory variable reviewed and AWL? ................................................................ 65 Question 2: What is the likely association between each explanatory variable reviewed and AWL, during the RPS period?........................... 67 Question 3: What is the likely association between each explanatory variable reviewed and AWL, during the post-RPS period?................... 68 Fiber Prices ..................................................................................................... 69 Variable Review........................................................................................... 69 Question 1: What is the likely association between each explanatory variable reviewed and AWL? ................................................................ 70 Question 2: What is the likely association between each explanatory variable reviewed and AWL, during the RPS period?........................... 71 Question 3: What is the likely association between each explanatory variable reviewed and AWL, during the post-RPS period?................... 72 Trade and Processing Variables...................................................................... 73 Variable Review........................................................................................... 73 Question 1: What is the likely association between each explanatory variable reviewed and AWL? ................................................................ 79 Question 2: What is the likely association between each explanatory variable reviewed and AWL, during the RPS period?........................... 80 Question 3: What is the likely association between each explanatory variable reviewed and AWL, during the post-RPS period?................... 81 Consumer Expenditure Variables ................................................................... 82 Variable Review........................................................................................... 82 Question 1: What is the likely association between each explanatory variable reviewed and AWL? ................................................................ 91 Question 2: What is the likely association between each explanatory variable reviewed and AWL, during the
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