Investigation of Long-Term Memory and Price Bubble in Red Meat and Chicken Meat (Case Study of West Azarbaijan Province)

Document Type : Research Paper

Authors

1 Master's Degree in Economics,Faculty of Economics and Management ,urmia university,urmia,iran.

2 Associate Professor of Economics,Faculty of Economics and Management ,urmia university,urmia,iran.

Abstract

As an essential and strategic product, meat has a special importance
in the household basket of every Iranian. The statistics of 2019 of
Iran Statistics Center show that in the West Azarbaijan province, the
expenses related to the purchase of meat (both white and red) include
21% of the total expenses related to the food basket of an urban
household. Fluctuations in the prices of agricultural and livestock
products have consequences for both the supply and demand sides.
Therefore, knowing the price behavior of these products is important,
and if this structure is accurately identified, it is possible to
prevent excessive market price fluctuations with right time
intervention. we try to investigate the presence
or absence of long-term memory in the price of the aforementioned meat
types and the presence or absence of a price bubble in them. For this
purpose, the autoregressive fractional integrated moving average model
(ARFIMA) and the generalized Dickey-Fuller supremum test were used.
The results of the present study indicate that the price of sheep and
calves meat in West Azarbaijan province has a degree of fractional
integration and possess long-term memory characteristics, so that when
a shock occurs, its effect remains for a long time. However, the
investigation of the price behavior of chicken meat indicates the
existence of long-term memory in some periods and the existence of a
unit root in some other periods. On the other hand, the investigation
of the price bubble in chicken meat revealed that the price of chicken
meat has had a bubble behavior for 4 periods and has moved away from
its long-term value due to high volatility and explosive behavior.
Also, the investigation of the price bubble in lamb and calves meat
revealed that these items also experienced price bubbles in some
periods.

Keywords

Main Subjects

References

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Agricultural Economics
Volume 17, Issue 3 - Serial Number 3
November 2023
Pages 143-166

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