Investigation of cereal price transmission in Fars province

Document Type : Research Paper

Authors

1 Department of Agricultural Economics, Shiraz University

2 Professor of agricultural economics, Faculty of agriculture, Shiraz university

Abstract

How to transfer price of agricultural products and its changes are considered as one of the most important indices of market performance and the main means of resource allocation in the economy. Assessing how price changes are transferred among different market levels is very important for the factors involved in production management and marketing and policymakers, and this information can be used in management decisions. Whenever occurs a disruption in the price transfer mechanism, the market system will not function properly and asymmetric price transfer can disrupt price signals and force the government to intervene to redistribute resources.
Materials and methods
In this research, the transfer of prices between wholesale and retail levels of beans in Fars province during the period 1999:03 to 2017:02 was studied. Due to the nature of the data studied and the occurrence of structural break in the variables, were used the HEGY unit root test and unit root test with structural break. Also, due to the spillover effects in the market of alternative products, the retail price of alternative products was also included in the models. To investigate price transmission patterns, the error correction approach with structural failure was used.
Results and Discussion
The results showed that in the short term for tiny pea and large lentil the price transmission is asymmetric and for large pea and tiny lentil is symmetric. In the long term, price transmission is asymmetric for all products, which seems to be due to the continuation of negative effects of economic sanctions and high

Keywords

Agricultural Economics
Volume 14, Issue 1 - Serial Number 1
August 2020
Pages 145-165

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