Analysis of Dairy Product Price Transmission in Hungary: A Nonlinear ARDL Model
This paper addresses the assessment of the price transmission of dairy products in Hungary. Monthly prices are used in testing the hypothesis of asymmetric price transmission between farmers and retailers. The magnitude of short- and long-run asymmetric transmission between price levels is measured...
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| Format: | Article |
| Language: | English |
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MDPI AG
2020-06-01
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| Series: | Agriculture |
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| Online Access: | https://www.mdpi.com/2077-0472/10/6/217 |
| _version_ | 1797565752711053312 |
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| author | Marwa Ben Abdallah Maria Fekete Farkas Zoltan Lakner |
| author_facet | Marwa Ben Abdallah Maria Fekete Farkas Zoltan Lakner |
| author_sort | Marwa Ben Abdallah |
| collection | DOAJ |
| description | This paper addresses the assessment of the price transmission of dairy products in Hungary. Monthly prices are used in testing the hypothesis of asymmetric price transmission between farmers and retailers. The magnitude of short- and long-run asymmetric transmission between price levels is measured through a nonlinear autoregressive distributed model (NARDL). The cointegration of variables is validated through bounds test of the NARDL model. The estimated NARDL model proves the existence of long- and short-run asymmetric relationships between producer milk price and most retailer dairy product prices. Furthermore, the model confirms the presence of a significantly positive long-run price asymmetry for butter, buttercream, sour cream, and Trappista cheese. The positive long-run price transmission asymmetry results could be explained by the strong market power of milk processors, which are granted through their concentrations and the absence of competitiveness in the market. The short-run asymmetry of price transmission could be explained by implementing some policy interventions, such as the milk quotas, which limit milk production. Analyzing the asymmetric relationship between the producer milk price and the retailer dairy product prices could give a clear vision of the dairy sector and how prices move between market actors, highlighting the retailers’ purchasing power feature, and its role in determining the market price interaction. |
| first_indexed | 2024-03-10T19:17:27Z |
| format | Article |
| id | doaj.art-edaf193405d14dae81926c7fa59ccde9 |
| institution | Directory Open Access Journal |
| issn | 2077-0472 |
| language | English |
| last_indexed | 2024-03-10T19:17:27Z |
| publishDate | 2020-06-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Agriculture |
| spelling | doaj.art-edaf193405d14dae81926c7fa59ccde92023-11-20T03:20:29ZengMDPI AGAgriculture2077-04722020-06-0110621710.3390/agriculture10060217Analysis of Dairy Product Price Transmission in Hungary: A Nonlinear ARDL ModelMarwa Ben Abdallah0Maria Fekete Farkas1Zoltan Lakner2Doctoral School of Management and Business Administration, Szent István University, 2100 Gödöllő, HungaryFaculty of Economics and Social Science, Szent István University, 2100 Gödöllő, HungaryDepartment of Food Economics, Faculty of Food Science, Szent István University, 2100 Gödöllő, HungaryThis paper addresses the assessment of the price transmission of dairy products in Hungary. Monthly prices are used in testing the hypothesis of asymmetric price transmission between farmers and retailers. The magnitude of short- and long-run asymmetric transmission between price levels is measured through a nonlinear autoregressive distributed model (NARDL). The cointegration of variables is validated through bounds test of the NARDL model. The estimated NARDL model proves the existence of long- and short-run asymmetric relationships between producer milk price and most retailer dairy product prices. Furthermore, the model confirms the presence of a significantly positive long-run price asymmetry for butter, buttercream, sour cream, and Trappista cheese. The positive long-run price transmission asymmetry results could be explained by the strong market power of milk processors, which are granted through their concentrations and the absence of competitiveness in the market. The short-run asymmetry of price transmission could be explained by implementing some policy interventions, such as the milk quotas, which limit milk production. Analyzing the asymmetric relationship between the producer milk price and the retailer dairy product prices could give a clear vision of the dairy sector and how prices move between market actors, highlighting the retailers’ purchasing power feature, and its role in determining the market price interaction.https://www.mdpi.com/2077-0472/10/6/217dairy sectorasymmetric transmissionNARDLHungary |
| spellingShingle | Marwa Ben Abdallah Maria Fekete Farkas Zoltan Lakner Analysis of Dairy Product Price Transmission in Hungary: A Nonlinear ARDL Model Agriculture dairy sector asymmetric transmission NARDL Hungary |
| title | Analysis of Dairy Product Price Transmission in Hungary: A Nonlinear ARDL Model |
| title_full | Analysis of Dairy Product Price Transmission in Hungary: A Nonlinear ARDL Model |
| title_fullStr | Analysis of Dairy Product Price Transmission in Hungary: A Nonlinear ARDL Model |
| title_full_unstemmed | Analysis of Dairy Product Price Transmission in Hungary: A Nonlinear ARDL Model |
| title_short | Analysis of Dairy Product Price Transmission in Hungary: A Nonlinear ARDL Model |
| title_sort | analysis of dairy product price transmission in hungary a nonlinear ardl model |
| topic | dairy sector asymmetric transmission NARDL Hungary |
| url | https://www.mdpi.com/2077-0472/10/6/217 |
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