Threshold Price Transmission Model in Iranian Chicken Market

مجله اقتصاد و توسعه کشاورزی

Article 13, Volume 24, Issue 3, October 2010   

Document Type: Research Article

DOI: 10.22067/jead2.v1389i3.7736

Authors

M. Ghadami Kohestani^{* 1}; A. Nikoukar²; A. Dourandish³

¹Animal Science, Agricultural Faculty, Ferdowsi University of Mashhad

²Agricultural Economic of Khorasan-e Razavi Payam-e Noor University

³Agricultural Economic, Agricultural Faculty, Ferdowsi University of Mashhad

Abstract

Abstract
Asymmetric price transmission through extending marketing margin generates rents for marketing and processing agents and affects the consumers’ welfare. Because of this reason, price transmission analysis in agricultural markets is important both in economical and political aspects. This paper conducted with the aim of analyzing price transmission in Iranian chicken market. In this study, using weekly data for farm and retail prices for chicken during 1381-1388 and Threshold Model, price transmission analysis is done. Results show that price transmission in Iranian chicken market is asymmetric and farm price increases transmit to the ratail level more and faster than price decreases. Also, market adjustment policy has not had any significant effect on price fluctuations. We believe that asymmetric price transmission in Iranian chicken market is generated for the reason of high inflation rates and non-competitive structure and existence of market power in slaughtering industry. Thus, we suggest government to choose protection policies concerning private sector for investing on slaughtering industry in those provinces that have insufficiency slaughtering capacity.

Keywords

Chicken; Iran; Price Transmission; Threshold Model

References