Price Transmissibility in Iranian Meat Market

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Abstract

Prices of meat in the international and a nation's internal markets tend to be closely related to each other. This relation could be sometimes harmful and due to lagged responses, meat prices at the internal market would subsequently increase as input prices increase at either the internal or international market. Price uncertainty and transmition are two important problems facing a nation's meat producers and Iranian consumers. The aim of this study was to investigate meat price relationship in the internal and international markets. Con-integrated VAR models were considered for chicken and red meat markets to study price relationships. The results indicate that there is a relationship between corn plus chicken world prices and international chicken prices. The results also indicated that price transmition in chicken market is more pronounced than in red meat market. This may be due to more marketable and importable inputs for chicken market. In addition, institutions are comparably more organized in chicken market sector.

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