No. 80. AN INVESTIGATION INTO THE RELATIONSHIP BETWEEN PRODUCER, WHOLESALE AND RETAIL PRICES OF GREEK AGRICULTURAL PRODUCTS

Published in DISCUSSION PAPERS

I. Resiti. 2005.

 

In this paper price relationships and patterns of price transmission among farm, wholesale and retail levels are analyzed for potato, tomato, orange and milk markets in Greece. Lag length, direction of causality, and asymmetric relationships are empirically verified. The analysis is performed using the co-integration approach introduced by von Cramon-Taubadel (1998), on monthly price data for the period 1995-2003. The results indicate that a long-run relationship exists between each pair of producer and retail prices for all products. The direction of Granger-causality runs from retail to producer prices for all products except oranges and milk where it runs from producers to retailers. Perfect price transmission between farmers and retailers is accepted in the case of potato and tomato. The results support the hypothesis of asymmetric price transmission between farm and retail levels for all products. In contrast, symmetric price transmission between farm and wholesale levels exists for all products. Especially, for potato, asymmetric price transmission was found between the two marketing levels. The empirical results indicate that the inclusion of the wholesale level in the marketing chain plays an important role in the analysis of price transmission.

 

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