Vertical Price Transmission in the Market of Potato and Onion (Case Study: Kurdistan Province)

Document Type : Research Paper

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Abstract

In this research, price transmission between wholesale and retail levels of two products, potato and onion has been studied. The data of wholesale and retail prices of Kurdistan province from 1386:12 to 1392:3 were used. According to the results of the ADF unit-root test series retail and wholesale prices of two products were integrated of order 1 and the Johansson cointegration test results indicated the prices for products were two series cointegrated. To examine the causal relationship between retail and wholesale prices of products, Toda –Yamamoto (1995) test was used and the results indicated that there was a one-way causal relationship from wholesale to retail for potato and onion. Hansen(1999)’s Sup-F test was carried out to examine the existing of nonlinear price adjustment that the result indicated that there were nonlinear price adjustment for potato and onion. Therefore, univariate TAR, M-TAR and LSTAR models were used. The results indicated asymmetry price transmission in potato and onion market. 

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References

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Iranian Journal of Agricultural Economics and Development Research
Volume 47, Issue 3
January 2017
Pages 533-543

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